The evening herald. [volume] (Shenandoah, Pa.) 1891-1966, 1896-06-16
BOND INVESTIGATION.
Secretary Carlisle Appears Before
the Senate Committee,
RELATIONS WITH THE SYNDICATE.
The Head of the Treasury Department and
His Assistant, Testifying Under Oath,
Tell Of the Conferences with Mr.. Morgan
and Other New York Bankers,

Isle was examined under oath yesterday
by the senate committee appointed to in
7estigate recent bond issues. The hearing
was held in the rooms Of the senate COM
mittee on finance, Senators Harris, Vest,
Walthall, Jones, of Nevada, and Platt
being present. Chairman Harris explained
that the committee had decided to take
all the testimony under OATH and did not
wish to make Determinations. Mr.. Car
Isle responded that he expected and de-
sired to be put under oath.
Mr.. Vest began the examination, asking |
for fuller explanation of the first bond |
contract with the Morgan syndicate than |
had been given in Mr.. Carlisle's written |
statement His main purpose, Secretary
Carlisle said, was to prevent the shipments |
of gold from this country. Mr.. Vest asked
who made the first suggestion as TO the
protective clause in the bond contract with
the Morgan syndicate The secretary an
swered that the first draft was made in his
private office and then taken to an adioin-
ing room and shown to Mr. Morgan and
Mr. Francis Lynde Stetson, after which
some changes were made. This was the
Mr. Stetson, the secretary explained in re-
sponse to inquiries, who had been the law
partner of the president
you never had negotiations with any
other bankers outside of the Morgan syn
dicate?" asked Mr.. Vest.
There was some inquiry. but no nego-
tiations were opened, said the secretary.
Mr. Carlisle went on TO explain that the
! president was kept apprised of all phases
of the negotiation. One of Mr.. Vests
questions referred to the time of the pres
| ident's information as compared with that
Of Mr.. Belmont, TO which the secretary
said that the presidents message giving
Information to congress as to the sclose of
the bond transaction was sent at noon
while Mr.. Belmont did not reach Wash
ington until p m
To Mr.. Vests questions as to why pub
lie bond sale was resorted TO at later
date, when the early sale was by private
contract Mr.. Carlisle said the first move
was due entirely to the emergencies exist
Ing and TO the disturbing reports which
were without u shadow of offoundatiOn that
the government had long contemplated u
bond issue
Mr. Vests question turned to the Graves
hid, which was rejected, the amount of the
Graves award for s4,5OO,0OO Of bonds being
given to the Morgan syndicate. He asked
why, after the Graves bid was rejected,
the government did not receive the benefit
of the bonds, instead Of the benefits going
TO the Morgan syndicate under their
''blanket bid"
Mr.. Carlisle said that was matter of
opinion, and in his Judgment the Graves
bid was nullity, after which the Morgan
hid, which wns the next highest, took the
bonds His action, he said, was taken
after consulting the law officers of the
government. He would have taken the
same course If the price of the bonds had
; fallen.
"But would the syndicate have taken
the same course II the bonds had fallen?'
interposed Mr.. Jones.
The secretary answered that his course
proceeded without reference TO what the
syndicate desired or would do. He be-
lieved, however, that if the price of the
bonds had fallen he could have compelled
the Morgan syndicate to take them.
rs 1t not fact" asked Mr.. Vest, ''that
because the syndicate had carried out the
protective clause you were inclined to favol
then?"
mot In the least" declared the secre-
tary, emphatically. 81 am not conscious
Of any such feeling"
"But you and the president were pleased
with the manner In which the protectiv,
clause had been carried outY" queried Mr.
Vest.
"Yes, but I am not conscious Of the re
motest feeling of favor resulting"
: In answer to further questions Secretar,
Carlisle declared he had never contem
plated paying in silver.
Assistant Secretary Curtis was exam
ined rapidly and pointedly by Mr.. Vest
Mr.. Curtis said he had gone to New Yorl
by direction of Mr.. Carlisle before the syn
dicate bond contract was made, to asceI
tain the temper of the situation, He ha,
visited bankers, officials, etc
did you expect to get the temper of th
situation from the bankcrs?" asked Mr.
Vest.
The assistant secretary responded tha
he had talked with men at the clubs anC
with Mr.. Fairchild and Mr.. Stewart. Hi:
first specific instructions from Mr.. Car
Isle were to ego and zee Mr.. Belmont
The secretary directed him to see wha
could be done to get gold from abroad
but authorized no propositionto be made
Mr.. Belmont showed him unfavorablC
cablegrams from Europe
Mr. Vests questions indicated surprise
that Mr.. Belmont should know of thC
treasurys need of gold and should be ne
gotiating with Europe before Mr.. Curti.
had arrived.
The subsequent testimony showed that
Mr.. Belmont's view was pesslmistic as tc
getting gold abroad. Mr.. Morgan prom,
ised to do the best he could At later
meeting at Mr. Morgan's house, arranged
by telephone message between New Yorl
and Washington, the two gentlemen told
him they could get gold abroad and sell
100000 of bonds there.
1t was understood that Mr.. Curtis would
telephone Mr.. Morgan from the treasury
at 3 o'clock the next day as TO whether the
general opinion had been approved He
telephoned Mr. Morgan that messenger
would carry a letter to him that night
! The letter which was from Mr., Carlisle
said the interest rate was too high. The
two fnanciers then came TO Washington
Mr.. Belmont calling on Mr. Carlisle and
Mr.. Morgan on the witness
Mr. Morgan said it was urgent for the
government to act quickly in order TO he
able to continue its policy of gold pay