The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1896-01-16
THE BOND SYNDICATE


MIR. Morgan's systematically the syndi-
cate Was Formed and why 1t Is Now
Broken Up.
New York, Jan, 15.-The government
bond syndicate organized by Mr.. j.
Pierpont Morgan has been dissolved.
The formal notice to that effect to the
subscribers to the syndicate was ac-
companied by circular letter from Mr..
j. Pierront Morgan. The letter, which
was made public this morning, is as fol-
lows:
90 Wall Street,
New York City, Jan. IA, 1896.
Gentlemen: In sending you formal
notice of the dissolution of the United
States bond syndicate in which you
have co-operated, it is proper that !
should make some statement showing
why the syndicate was formed, what
action has been taken on it's behalf, and
why it is now dissolved.
son December 90 last, I was invited
to Washington for conference. Dur
ing my visit there, as have verbally
stated to everyone who has conferred
with me on the subject no negotiations
for loan were commenced or even
suggested, nor was there then or since
any agreement or request that | should
take any steps preparatory to making
a contract.
THE result of my visit was that ]
came to the following conclusions:
"First-That the president and secre-
tary of the treasury were determined
to use every power at their command
to restore and maintain the gold re-
serve.
'Second-That no steps would be TAX
en- or even any preparatory negotiations
commenced until it was ascertained
what action. if any, congress would be
likely to take in response to the ap-
peal of the president for adequate and
improved means for making such resto-
ration.
''Third-That the executive depart
ment would prefer, if possible, to secure
$4,000 900 Of gold in order to avoid any
probable necessity for similar nego-
tiation before the meeting of the new
congress in 1897
"Fourth-That it was absolutely GER
tain that no adequate relief could be
obtained from congress, and that NO
bill could pass through the senate fol
the Improvement of the monetary sys-
tenn Of the country.
Upon my return, appreciating the
full gravity Of the situation and keen
1y alive to the fact that early action
was essential, and in order that might
be prepared, if called upon, to act
promptly, took steps to ascertain to
what extent it would be possible to Sc
cure cooperation of capitalists, insti-
tutions and others in forming a syndi-
cate which would agree to sell to the
United States government 5000, 900, 900 OF
gold coin.
In my efforts, while far from san
guine as to the result, the ready &C
uuiescence of James StilInan, Esq,
president Of the National City bank,
New York; Edward d. Adams, Esq,
with full power representing the
Deutsche bank of Berlin, Germany; John
A. Stewart, Esq, president of the
United States Trust company; Plny
Fisk, ESQ.,, of Messrs Harvey Fisk &
Sons, and others, to all of whom I am
deeply grateful, encouraged me to pro-
ceed
The contract. as prepared and signed
by the participants, did not stipulate
whether the purchase should be by
private contract of by public offer The
only proviso Gin addition to the import
ant one that no gold should be with
drawn from the treasury was that the
minimum amount of the contract should
be $100, 00O 900 and the maximum the full
amount of participations which might
be secured before it became necessary
to act, not exceeding 100000 600
The applications for participations
far exceeded my anticfpations. At the
end of three or four days the total of
$200, 000, 900 was reached, and l had in
my hands full authority which would
enable me, whenever and however the
executive might decide to act, to secure
that amount of gold for the treasury
reserve in exchange for United States
bonds.
'.The participants may be divided in
to four classes:
Observation-Disclosures, banking firms
and others in Europe who were prepar-
ed, if necessary, to ship the amount of
their participation in gold to this side.
"Second-Banks, savings banks trust
companies and private individuals
throughout the United States in posses
sion of the actual gold coin who desired
to secure bonds, either for investment
or as a basis for national bank circula-
ton.
'"Third-Banks of New York, Chicago,
Boston, Philadelphia, Cincinnati and
other cities in possession of gold who,
without necessarily desiring bonds for
investment, We're willing to aid in the
movement to sustain the treasury re-
serve, and exchange their gold for
United States bonds, expecting after
wards to sell the same in the market
Observation-Disclosures banking firms
and others, who, without being in pos
session of the actual gold, were willing
and able to obtain that gold at what
ever cost, for deposit with the treas
ury in payment for bonds, provided the
movement contemplated could be car
ried out.
81 may add for your information that
the 5000, O00, 900 participations were ABOUT
equally divided between the four class
es Indicated
'"The formation of the syndicate being
completed / commenced negotiations
for the permanent placing of a portion