The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1896-06-16
Appear Before the Bond InVes-
tigating Committee.
TURNING THE SCREWS.
Some New Information Was
ELECTED From Carlisle.
The Redemption Fund Was
Wholly Exhausted.


pointed to Investigate the recent bond
issues. The hearing was held in the
rooms Of the senate committee Of I'm
ance, Senators Harris, Vest, Walthan,
Jones CNeV.). and Platt being present
Chairman Harris explained that the
committee had decided to take all tes-
timony under oath and did not wish to
make determinations. Mr.. Carlisle
responded that he expected and desired
to be put under oath. Mr.. Vest began
the examination by 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 said
Secretary Carlisle, was to prevent ship
ments Of gold from the country.
Mr. Vest asked, who made the first sug-
gestion as to the protective clause in
the bond contract with the Morgan syn
dictate. The secretary answered that
the first draft was made in his private
office and then taken to an adjoining
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
response to inquiries, who had been the
law partner of the president.
Mr.. Vest asked why the contract had
been given to the syndicate to which
Mr.. Carlisle replied with a lengthy ex-
PLANTATION of the great emergency ex-
listing which would not permit delay
for usual fOrmalities Of bond sale.
You never had negotiations with any
other bankers outside of the Morgan
syndicate" asked Mr.. Vest There
was some inquiry but no negotiations
We're opened" he said. Secretary Car
isle then went on to explain that the
president was kept apprised of all
phases of the negotiation one of Vests
questions referring to the time of the
presidents information as compared
with that of Mr.. Belmont. The secre-
tary said that the presidents message
giving information to congress as to
the close of the bond transaction was
sent at noon while Mr. Belmont did
not reach washington until p. m. To
Vests question as to why the public
bond sale was resOrted to at a later
date when the early sale was private
contract, Mr.. Carlisle said the first
move was due entirely to emergencies
existing and to disturbing reports,
which were without a shadow of fOun-
dalton that the government had long
contemplated bond issue. Vests
question turned to che Graves bid,
which was rejected, the amount of
Graves award, 81, 5OO,O 600 of bonds be-
ing given to the Morgan syndicate. The
senator asked why, after Graves bid
was rejected, the government did not
receive the benefit of the rise which
had occurred in the price Of the bonds
instead of the benefit going to the Nor
gan syndicate under their blanket bid.
Mr.. Carlisle said this was a matter of
opinion and in his judgment Graves
bid was nullity after which the Nor
gan bid, which was next highest, took
the bonds. His action, he said, was
taken after consulting law officers OF
IA
the same course if the price Of
the bonds had fallen. rs it not a fact
asked Vest, that because the syndf-
cate had carried out the protective
clause you were inclined to favor
them ?" Not in the least declared the
secretary, emphaticalIy. I am not con-
sciOus of any such feeling. But you
and the president were pleased with
the manner in which the protective
clause had been carried out?'' inquired
Mr.. Vest. yes, but / am not conscious
Of the remotest feeling in their favor
resulting"
One of Mr.. Waltha1l's questions
brought out a statement from Carlisle
as to the critical condition of the treas
ury at the time the syndicate contract
was made. The fact was, he said, that
the treasury had reached a point where
there were gold certificates Outstand-
ing for which it had no gold coin to
meet them He had never stated this
fact before.
II suppose YOU never contemplated
paying in sflver?" inquired Vest.
The secretary replied that the pres
ent policy of paying in gold had been
followed so long that he did not cOnsid-
er it expedient to depart from it at a
time of emergency.
Piatt inquired as to the current re-
ports that Carlisle at one time had
contemplated paying in silver, but that
1t had come to the ears OF the presi-
dent, who said 1t must not be done.
Carlisle said he had heard of these
reports and the statement that the
president had OverruIed him. had not a
word of truth in it. The secretary read
authorized statements of the president
and himself showing that they were
agreed on maintaining the credit of the
government by gold payments. He
referred incidentally to some talk with
Vest as to silver payments.
Don't you remem ber, said Vest,
that in that conversation with me
you said that in the event of reaching
the limit of the gold reserve. you had
one remedy available, namely: to use
you would do it if it were not for the
provision as to maintaining the pari-
ty."
Carlisle said he thought this view as
to parity expressed his ideas, although
he could not recall the exact converse
'sThen at that time" pursued Vest.
you did not claim that gold payments
were in pursuance of the policy estab-
ished by Secretary Foster?"
do YOU remember another CONVEX
satiOn," continued Vest, f'in which you
told me that you had seen the presi-
dent and he felt that when the holder
Of a greenback demanded gold he was
entitled to it2' Il recall no such con-
versatfOn," answered the secretary.
And that" continued Vest "he lthe
presideut) had called cabinet meeting
for next morning." Carlisle said it
would be no violation OF cabinet CON
ddence to say that question never came
up at a cabinet meeting.
After further examination Carlisle