New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1896-01-11
TO MODIFY THE CALL.
TERMS OF THE BOND ISSUE LIKELY TO
Be CHANGED.
LIKELIHOOD THAT THE SYNDICATE WILL. BE DIS
SOLVED BIT MEMBERS OF IT MAY UNDER
WRITE THE LOAN PROSPECTS OF

LARGE SUBSCRIPTIONS ABROAD.
There was talk in Wall Street yesterday that
, the syndicate organized to purchase the forth
coming issue Of 800 900 900 Of Government bonds
was to dissolve. No information on the sub
ject could be obtained owing to the absence
In Boston of j. PIerpont Morgan. the head Of
! the ,yndicate
1t Is known that the syndicate was formed 10
take 800 OOO OOJ OF bonds firm" or in other
words. absolutely. and 800 900 900 more II called
upon by the Government to do SO. To put it
/ in another way. the syndicate agreement pro-
vided explicitly for a purchase of not less than
500 900 600 of bonds According 20 the agree
/ ment therefore, the syndicate could not bid
| for such OF the bonds were not awarded
under the public offering to individual bidders.
Should the syndicate be dissolved many of
the members of it would put in separate bids,
and thus the full amount Of the bonds would be
surc to be bid for The applications for the
bonds. in fact. would IN all probability largely
exceed the amount offered.
The dissolution OF the syndicate, for another
/ thing. would have tendency u relax the tom
sion on the money market. Banks for in
stance. which accepted invitations t. join the
syndicate but will not become bidders on their
own account. will let customers who desire to
become buye Of bonds have the gold which
/ they themselves had been saving to use In
payment for bonds and the customers VIII not
! have TO hunt around in the open market for
/ loans and likewise for gold to he paid for with
/ money borrowed at rates considerably above
what the banks would charge them. Another
consequence will be the disappearance Of or AT
| least a great reduction in, the premium on
| gold.
/ There are many corporations with larg" sur
! plus funds which belong to the syndicate out
which want to buy the bonds anyway as an
| Investment. one Of these Is the New-fork Life
/ Insurance Company. which subscribed for $lo'-
Oco 900 Of the bonds under the syndicate agree
ment II the syndicate dssOlves this company
will send bid TO the Treasury Department.
II has in hand the gold with which to pay Tor
the bonds. There other concerns In the
Same position. Among them may be named the
/ New York Life and Trust Company Ca com
/ pany altogether distinct from the New-fork
Life Insurance Company. the United states
Trust Company and the Farmers Loan and
Trust Company.
HEAVY HOLDERS OF GOLD.
The principal tru., and insurance companies
are heavy holders Of gold. Their holdings are
not known because they do not make reports IKE
the banks which belong 20 the Clearing House
A this gold Is not deposited In banks but Is kept
in the vaults Of the companies themselves. or IN
the vaults Of safe-deposit rpanies. 1t does not
figure In the bank reserves. and accordingly It's
delivery to the Government viii not contract the
circulating medium Of the country.
1t has already teen rtimated that there may
| y. a .iodihcation ~ the terms under which the
y bonds are offered by the Secretary of the Treas
urv in order that the money market shall not be
disturbed by the Withdrawals OF funds 10 be en-
ployed in payment Tor the bonds. 1t has been
suggested To- tn Administration by officers OF
New-York banks that after payment u the hrsi
insialmcni ~ ~ per cent on the bonds the pur-
chasers shall b- allowed 10 pay tn" balance az
ihclr convenience within specified time the
Treasury meantime retaining the bonds as Sc
cirritv for the final payment. also that banks
throughout the country wherever Here are sun
Treasures shall be designated as depositlries
for the gold paid in for the bonds. and that the
gold shall be lef, In ,nese banks t. be counted n
their reserves bu' not disbursed for a consider
able period. In thi- way the equilibrium ~ the
II! ncy market woud be fairly well maintained
The amount paid for the bonds would not "r
taken out Of circulaton, and at the same ume
the gold would bee counted IN the treasury re-
serve.
event Of this dissolution Of the syndicate cannot
be tod. 1t Is believed. h. Wever mat th're VIII
be- bids for many millions from "eImani ana
England. The "Deutsche Bank group in Berlin
has been particularly anxious 10 secure oonds
British bankers know there viii be a good pTpH' /
the bonds II tnrN OuN 70 resell ~ 'uSA'..i'
and II is thought tha bids from London VIII be |
much larger than has been anticipated. ,
The board Of directors Of prominent banK |
by resolution directed one Of It's members, hn- |
self a conspicuous nnancer to walt upon the |
managers Of the syndicate and request them TO
underwrite the bond issue-that IS. To agree l" /
take what the public did not subs cribe for
A report that Lawson, Weidenfeld & 60. had /
imported 100000 in 60 from Europr WIN Wn,rn
to buy bonds. was answered by camille N'lu'H-
field of the firm, as follows
The story that We have WltndiaWh from tuN |
Morgan bond syndicate is entirely untrue we
would have been much pleased To haVe been a |
member Of the Morgan syndicate, but we are not |
We intend to bid for some If the Donls on De-
half Of clients, but we would hay" preferred 20 /
have made our bid through Mr. Morgan.
WHY THEY ARE DATED BACK.
There has been much curiosity to know why
the bonds are to be dated February |. 1929. ana
one years coupons detached. This course is pur-
sued simply to avoid creating new class of
bonds BY dating the bonds back one year they
will mature the same as those issued in Febru-
airy. 1885, and the market price FOR them VIII De
the same as for the other bonds
There are not r-w bankers who say they
would prefer To subscribe for per cent bonds at
par rather than for I per cent bonds at a pre-
MUM. Three per cent bonds would be marketable
at par. anyway right up t. maturity, While with
per cent bonds the premium would disIpps az
: they approached maturity. Banks which IN
vested In the per cent bODuS would nave u
charge off the decline In premium AT different
periods and I'm the OF National banks II
would be no easy thing to fix the value of the
bond. in the five different reports which tncN
are required TO make during a year TO the C'n-
trOller of the Currency.
The Withdrawals OF gold from the SubTreas-
ury Yesterday were $3.50 600 by Lazard Freres.
$500 600 by Heidelbach. lex lhcimer co. and
500 600 by Watson & Brown. The first two lots
will be sent To Europe by the Etruria when
sails to-day and the last lot will be used - par
chase Government bonds. The amount OF gold
taken for export far less than had been
looked for. Demand bills Of exchange were f.
fered rather freely at 4s9. The statement that
J. & W. Seligman & Co. Withdrew 5000 In gold
from the Sub-Treasury on Thursday was an