The times. [volume] (Richmond, Va.) 1890-1903, 1895-09-24
All Have Their Checks >ow-No tsp'"""-
lions Made, but the Actuai 'FRONT.' %"
the Sale Was Only 400 Per Cent.
,merican end of the bond deal:


gain ............... ....-........ No'A--''''
Except for a sort Of underlined right to
have the first option TO bid for any
loan the Government may conclude 20
offer before October LIST. the great Nor
gan-Bclmont Government-bOnd syndicate
does not exist
Yesterday a series OF brief notes IN
very large envelopes 'w*nt from We
office Of the contracting syndicate bank
crs 20 the members of what mas Deen
called ~ contributing syndicate IN
forming them that the enclosed checN
In each case represented the pfon.s a..
cruing from their contribution or soil
I'm February last.
There was no statement Of profit ana
losses: simply a check and a note mark
ed personal and confidential saying
that the profits. less expenses, lett the
amount Of the check.
The entire transaction was upon the
American half of the great deal as
the foreign allotment was from the start
left entirely apart, and In the close
personal control Of the contracting MOT
gan and Belmont houses here. and Of
the Morgan and Rothschilds houses
abroad.
sI.nicATE's CALL FOR COLD.
Immediately the contract was
signed the division was made, and the
plans of the syndicate were laid IN
vitatiOns were sent out al once 10 nank-
ers who had been active as sold-shlp-
pcrs. and who were supposed 10 nave
special facilities for getting gold az
first hand from the mining districts.
Invitations We're also sent 10 the nauon-
al banks. trust companies, ana savings
banks. and to some private banks, an
OF which were known 10 have heavy sup
plies of gold in their vaults. The great
profits Of the bond deal were pointed
out TO them. and they We're invited TO
become contributors to a great heap
Of gold.
Those who wanted bonds were told
they would be given them in considera-
ton of a contribution Of gold 10 twice
the amount Of the face of the bonds
they desired.
Thus the syndicate drew from many
a nook and corner a supply of coin
equal 10 the whole payment 20 be paid
the Government. and was able to
make those immediate heavy payments
which gave the syndicate such ire
mondous prestige. which re-estaniisn-
cd confidence. and which sent the stock
market on its upward spring boom.
Then came the alleged allotment or
the bonds on the basis OF li2 IL against
the price Of 0i.i9 which the Government
got for them The list of the allot-
ment has never been published. The sub
scrpuons far 0vcr-ran the amount 20 Dee
distributed, and the bonds were placed
by the syndicate managers where
they would do them the most good az
that time and in the future.
The gold provided 10y the subscribers
who got no bonds end half the total
affftu ..rff Nv ~ u
bonds was 10 De- paid back as a loan
I'm ordinary paper currency and I'm three
instruments 10 has been so repaid. None
Of the subscribers knew when the next
instalmcnt was coming. nor did any one
know when the final adjustment was 90
be- made Neither ala they know on what
basis tho profits were 20 boz calculated, nor
whether they were 20 receive interest ON
the loan demanded or az what rate OF
interest.
I'm fact. IL was one Of the blindest Of
blind pools which the banking world
has ever seen. ON one side was abso-
lutte confidence with cash TO back it; on
the other a closc-mouthd policy with
financial ability Of the highest grade.
Now comes the settlement. In the
first place the syndicate having the con-
tract credited itself with a commission
Of 81 of I per cent This brought the
starting point for reckoning profits up
70 1924 1t would have been am easy
matter 20 take the differences between
that and ll2 IL in reaching a final. but
the contract called for a watchful care
over the United states Treasury during
the seven or more months of the syn
dlcatc's existence.
CONTROLLING EXCHANGE nArEs.
This meant that the foreign exchange
market had to Doe kept under control by
the use of capital or 10y its hire If nee
essary.
Just what was done I'm this way or
what arbitrary par OF exchange the
syndicate adopted Jon making its COM
putations is difficult 10 tell from the
mere round figure of profit given, but
instead of the apparent profit Of the
contributing group % 1.2J per cent. which
is the difference between 1921 and 1880.
the profit was really only $50. The differ
ence between + % per cent and $50
per cent was eaten up in the syndicate's
efforts 20 control the exchange market.
Ia a round sum this was about $4,000.
But the contributing group were also
allowed 10y the syndicate interest at the
rate of per cent. on the gold advanced
above that required 20 pay for the bonds.
The paper money for this gold was paid
back az different times, but the interest
averages up TO ] 81 per cent. This,
added TO 4e0 per cent, makes total OF
G.65 per cent. for the contributing group.
Figuring on the actual time the con-
tributing group had their money out, the
rate of SO per cent. is the equivalent OF
about l3 per cont. per annum.
WAS rEtIIY GOOD THING.
This is really q very good return for
the use of money even gold money. for
few month in "a year during which
the banks have been loauing out cash
at the rate OF 4 IL per cent per year and
scramble az "a chance 20 loan IL at per
cent. There was not a grumble heard
at the getting of about Is por cent. for
the use of money I'm the face Of loan
market ruling al per cent.
In round figures. the syndicate paid
out 10 this group OF supporters about
z16i,0O, divided into interest for use OF
cash Of S6S 800 and profits on the deal Of
N592.y0
In closing up this part Of the great
deal there is no note taken Of the pronts
which came TO those who got bonds at
IL II and may now sell them In the oper
market at ~ L. The profits distributed
yesterday, Of course. do not include these.
but embrace only those profits which &c
TO those who were called in as money
lenders and particularly as gold money
lenders In the early days OF the synai.
Gates existence.
IT-ULTs TO rScLr staf.
With the net reserve down to 81. 10000