Pike County press. (Milford, Pa.) 1895-1925, 1896-02-21
ALLLEsSER MORGANs
HOW SOME FORTUNES WE'RE MADE
FROM THE BOND ISSUE.

Some Of the stories told Of the profits
made on the new bond sale by bidders
who went into it purely as a matter Of
speculation, without capital, and appar-
emily without responsible backing, read
like fairy tales.
Fortunes have been made in day
and that without the expenditure of a
dollar OF the assumption Of RESPONSE
bility.
1t has been in some instances a daz-
zling and glittering realization of wild
dreams of financial good fortune. Any
man could bid for bonds to an unlimit-
ed extent without a line OF guarantee
OF the deposit of a cent Of forfeit. Ad-
venturers with an eye out for the main
chance could not have imagined more
brilliant opportunity to clear enormous
profits without a particle of risk and
without the deposit of even the most in
significant stake.
The only wonder is that more did not
take advantage Of IL, for the game was
Une that almost any man possessed Of a
little familiarity with financial methods
and the rates of exchange might have
played with a fair chance of winning.
AS it was, some men without dollar
to their names and without any personal
financial responsibility put in their bids
for amounts of bonds which nobody but
a millionaire could have been able to
take mp, and which reputable banking
institutions would hardly have ventured
to attach their names to.
All they had to do was TO make out
their bids at varying rates, with little
shrewd calculation as to the price at
which the majority of the bonds were
likely to go.
For example, it was pretty thorough
" accepted in financial circles before
the bids were opened that any offer Of
119 or over was almost certain to COM
mand a block of bonds. Offers below
that rate might involve larger profits.
but there would be less degree of GER
tainty in the realization.
Il was to be assumed that the large
syndioates would take very considera-
BILE share of the bonds at the lowest
possible rate. but above this there
would be surplus to be divided among
the smaller bidders who made more
generous offers
All that was necessary, therefore,
was for the speculative individual to
enter his bid and complacently await
the result, knowing there was nothing
for him to lose and that there was much
that he might gain.
If his name should appear in the list
of awards, it would only be necessary
for him to go to responsible banker
who had facilities for securing gold
and sell his option on the bond at a
good margin.
There was plenty of time, according
to the terms of the sale. 1t was neces-
sary only to make the first payment Of
30 per cent in gold ON Feb. 10. That
day has not yet arrived, but the bonds
are already quoted at III in the open
market, and on a margin Of that size
there could be no trouble in disposipg
of the option at good profit. But even
If this did not materialize, there could
be no risk, for no deposit was required.
In case of failure to sell the option
or in case the rate offered was too high
for a responsible banker TO handle the
bonds at a profit no bidder was under
any obligation to close his contract, and
no penalty was involved.
1t is true the government retained the
right to reject any and all bids, and
several bids for great amounts, notably
one from Texas for 5000, 900, were
rejected in this way because they were
palpably the offers of irresponsible
banks. But in a list of nearly 5000
bidders it has. of course, been out of
the question for the committee ON
awards to detect every irresponsible
offer, especially where the address Of
the bidder was near some financial CEN
ter.
Wherever the government has offered
to public competition contracts for pub
lie works of any kind. it has been the
rule of the treasury department to re
quire each offer to be accompanied by q
certified check as an evidence Of the
sincerity and responsibility Of the COM
peting bidder. In some instances this
safeguard is required by law, and its
object is to prevent straw bidders from
entering into competition with respon-
sible contractors solely for the purpose
Of selling OF subletting the contract or
Of throwing it up altogether, in case
purchaser could not be found.
With the bidders for bonds nothing
was required except the ability to make
out a proposal intelligently and sign
name. tN
Several instances have already come
70 light where bonds have been allotted
10 men who had no intention of trans
ferring gold to the government vaults,
and doubtless there are others.
One of the successful bidders turns
out to have been bucket shop operator
in an eastern city, who entered bids at
different rates for several millions Of
bonds. More than 81 1000, 900 was al
lotted to him.
Before the award had actually been
made he had received an offer Of $780,,
900 for his chance, but refused it. Since
the award he has been offered $50, 900.
This shrewd Speculation two weeks ago
was ION his uppers. I" and il is said was
sued for a debt of less than 500, which
he was utterly unable to pay.
In this particular instance the opera
tor had taken the precaution, which
seems to have been unnecessary. OF get
ting an option upon gold. but be had
not been involved in any expense. The
bank from which he secured the option
will probably take the bonds of his
hands and clear such profit over the
$50. 600 as does not accrue to him.
One bidder in New York, who bid
sliRhtlY more than Ill, has been award
Cd $500, 600 in bonds, and has already
sold his option for SO, coo.
L A q mailnr of faci the rnaihnd nnr.