The Louisiana populist., 1895-12-20
THE LATE BOND DEAL.
PROFITS THE BANKERS MADE
OUT OF 1T.
Dealers to Rob tho Governments, How
the BANKERS Divided and Their Profits
on This Most Infamous of all Deals.

divided by Messrs. j. p. Morgan &
Co. The greatest care has been ex-
ercised to prevent publicity, and it is
difficult to obtain all the facts. Each
OF the twenty-seven bankers and
banks participating in the syndicate
has received c check representing its
share OF the profits with note of
explanation and a statement of the
transaction. But perfect secrecy has
been preserved regarding the allot-
ment OF the bonds, and no member of
the syndicate knows what other mem
bers received.
1t will De remembered that Messrs.
Morgan and Belmont entered into a
contract with Secretary Carlisle under
which they agreed to furnish the gov
ernment $500, 900 ounces of gold,
and as much more as might be neces-
sary at the rate of $17.SO4 per ounce,
taking in payment therefor 4 per cent
thirty-year bonds to the amount of
S62, $40, 500. As the government
price for gold is SlS.6OI per ounce.
the difference OF so cents amounted
to ~, 400, 900, which was the premium
paid by the syndicate for the bonds.
so that the total proceeds of the loan
to the government were $65, III, 800.
In other words, the syndicate pur-
chased bonds to that amount at the
rate OF $l04.4S although the price of
the same securities in the market at
that time was about $l19, and SINH
lar amount might have been sold to
the public at that rate if they had
been offered by the treasury. But
this sacrifice was paid by the presi-
dent, and the bonds were furnished
to the syndicate at price nearly 15
per cent below the market rate IS q
consideration for their services in
manipulating exchange so as to pre-
vent the export OF gold and protect
the treasury. 1t was a very costly
piece OF financiering.
Under the terms of their contract
the bankers were required to import
at least one half of the $500, 900
ounces of gold from Europe. They
thereupon invited the cooperation of
nearly all the large banking houses in
New York which have connection
abroad and a number OF purely Amer
lean bankers, who agreed to take
such share of the bonds as might be
allotted to them. The former agreed
to buy the gold required for payment
In foreign markets. The latter were
allowed to use the coin stored in their
vaults. As a matter of fact, however,
only S15. $50, 900 in gold was actually
imported, and that came through the
Rothschilds from the bank OF Eng
laud.
The syndicate OF ftwenty-seven banks
and bankers, which was organized by
Messrs. Morgan and Belmont, applied
for bonds with such eagerncss that it
was impossible to meet their demands,
ana an allotment was made by those
gentlemen in such an impartial man.
ner that no complaints have been
heard, although the actual amour. re-
ceived by the several institutions is
not known, even to their associates.
AS has been stated, the bonds
amounting in value to $65, 500,
were purchased from the government
at S1O4. 4.4S, or a premium OF S4.4S
above par. They were sold to the
syndicate at sl12, &c, an advance OF
&.77 on each bond of 500. At that
rate they yielded Messrs. Morgan and
Belmont 500, 949.075, or a profit of
A,S3l,572. This profit, however,
was not retained by those gentlemen.
They simply retained three-fourths of
per Get, as commission for their
trouble, or the sum of $685. 372, and
divided the remainder, which amount
ed to s4.344,42S. among their
associates in the syndicate,
which is equal to profit
of 6.672 per cent They also received
II per cent interest which accrued
upon the bonds before they were
finally distributed. That makes a to-
tai profit OF S.422 per cent upon every
dollar they furnished. As their money
was tied up for about six months, the
transaction netted them at the rate of
16.S4 per cent per year.
1t was the amount, namely. $i,344,-
42S, that Messrs. Morgan Il Co. dis
tributed among the members of the
syndicate the other day. The princi-
pal houses participating were j. z.
Morgan & Co., Belmont & Co., Nor
ton, Bliss & Co., Kuhn, Leob e. Co.,
Lazard Freres, Heidleback & Co.,
lckleheimer & Co., and the Chase.
First, Fourth, Hanover, City OF Com
merce, and Gallatin National Banks.
But the members of the syndicate.
II they were SO disposed, were en-
abled to double their profits by sslling
the bonds thus acquired, ana M ~ OF
them have already done So There is
always an active demand for govern
ment securities, and the market rate
at the present writing for this issue
is 1922. They secured their bonds at
$104. AS, with the commission of
Messrs. Morgan g. Belmont. which
vas three-fourths OF per cent added.
or Si05.23 gross; and have sold them