The representative. [volume] (St. Paul, Minn.) 1893-1901, 1895-07-24
(From New York World.

The statement in the World last
Wednesday that the plain letter of
the contract by which the Belmont
Morgan bond syndicate reaped profit
of about 2,OOO,O0O had been violated
was met with denial by the acting
head of the treasury department at
Washington. Assistant Treasurer
Hamlin said: "There has been no
modification in the contract. The
provision that one-half of the gold
for the total amount of the loan shall
be brought from abroad is to be car
ried out"
There is no longer any pretense
that the contract has been or is to be
literally carried out. 1t has been
radically modified for the profit of the
syndicate.
When the contract was made it was
for the placing of 3,5OO,OOO ounces of
gold in the United States treasury.
At first the receiving clerks began
weighing the gold as it was handed
in at the assay Office. This was
promptly checked, as it never was the
intention Of the syndicate actually to
put in that weight in gold. The
right was claimed to put in American
coin as Of full weight if above the
limit Of tolerance. This mean pos.
sible concession of 1880 ounces, or
over $35O,OOO worth of coin, ii pay
ment were made in coin at the limit
of tolerance.
Then the designation of banks as
coin depositors practically put the
use of millions Of government money
at the disposal of favored national
banks for many months. The Ameri-
can contribution of the gold pur-
chased by the government was
promptly paid in, and dollar for dollar
the bonds were passed out and inter
est on them began accruing.
Less than half the foreign gold SUBJ
scribed for the bonds was actually i'm
ported. Instead the acknowledgment
syndicate set out to prevent exports
Of gold in the ordinary trade channels
When the price of exchange ran up
close to the gold export point, or even
above it, the American bond sYndi-
cate furnished paper drafts on their
foreign correspondents. The higher
the rates exacted the better for the
writer's Of the exchange, and it was
generally understood that any export
Of coin in preference to taking the Of
fered paper would make matters very
unpleasant for the exporters.
AS most Of the banking houses that
profit by gold shipments were inter-
ested in the bond syndicate profits,
oppose the Morgan-Belmont-Ro -Roths-
finnC
do so profitably there was practical
union of all the financial giants to
prevent gold exports. The govern
ment had made the syndicate aboso-
Lutte master Of the exchange market.
For the bonds which were sold on
the other side, gold was paid by those
who took them after the bidding
there at ll2. The original plan was
to have that gold come here, but the
syndicate preferred to keep the yellow
metal in the vaults of the Rothschild
and Morgan houses in Europe and
gather up the coin for the American
treasury from American banks.
1t is now admitted by the partners
in the syndicate operation that the
original plan has been modified by the
treasury department at the request
of the syndicate, and it is added that
secretary Carlisle is highly gratitied
at the success of the operation.
The bond syndicate's absolute mast
cry of the foreign exchange market is
conceded, and it is equally plain that t
II the bankers have it in their power
to prevent gold exports absolutely
when it is profitable to do so the enor-
nous exports of gold prior to the bond
contract were not wholly uninfluenced
by their operations and interes is. AT
these: The bond syndicate received
$65, 100000 in government per CEN
bonds at about 104, which are Sellin :
in the open market for about 122
They and their associates have profit
ed about $12,000.000, and, although
they have not yet brought one-half of
the $65, 900, 600 from abroad, as was in
tended they should, they have stopped
fresh exports Of gold from the United
States.
Wall street is unanimous in it's ad-
miration Of the bond-syndicate genius
MIR. Morgan. 1t is said that at the
time of the contract every outlook
was blue, and the whole business
world. and particularly, the specula-
tive arena, was deluged with doubt
and gloom.
The sentimental effect of the gold
drainage was immense, and, with TIE
stoppage of that, boom set in which
has meant millions to Wall street and
millions more to the bettered busi-
ness outlook the country over. That
is the argument which was used tc
Justify the bond deal when it was
made at rate entirely at variance
with the credit Of the country and
which is now used to explain away all