Evening star. [volume] (Washington, D.C.) 1854-1972, 1896-06-15
Secretary Carlisle Before the Senate
Investigating Committee.
HIS TESTIMONY GIVEN UNDER OATH
He is Interogated by Messrs.
Vest and WaIthaIl.
THE SYNDICATE CONTRACT


oath today by the Senate committee APP
PORTED TO investigate recent bond issues
The hearing was held In the rooms of tho
Senate committee on finance. Senators Har-
ris, Vest, Walthall, Jones of Nevada and
Platt being present Chairman Harris ex-
planned that the committee had decided to
take all this 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 con-
tract with the Morgan syndicate than had
been given in by 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
answered that the first draft was made In
his private office, and then taken to an ad-
joining room and shown to Mr. Morgan
and Mr.. Francis Lynde Stetson. after
which some changes were made.
This was the Mr. Stetson. the Secretary
had been the law partner of the President
Mr.. Vest asked why the contract had been
given to the syndicate. to which Mr.. Car
Isle replied with a long explanation of
the great emergency existing, which, he
said. would not permit a delay for the
usual formalities of a bond sale. There was
much apprehension in financial circles as
to the situation. heightened by visit Of
Mr.. Curtis tc New York. which brought
out many newspaper conjectures. 1t was
not, however. until the Springer bill, so
called. relating to banking and currency
had been defeated in the House of Repre-
sentatives that 1t became evident that
steps must be taken to protect the treas
ury. The contract was closed the day at
ter the Springer bill was defeated in the
House.
hod
other bankers outside Of the Morgan syn
dicate?' asked Mr.. Vest.
There was some inquiry. but no nego-
tiations We're opened said the Secretary.
The President Informed.
Mr.. Carlisle went on to explain that the
President was kept appraised Of all phases
Of the negotiation. One of Mr.. Vests ques-
lions referred to the time Of the Presi-
dents information as compared with that
Of Mr.. Belmont. to which the Secretary
said that the Presidents message giving
information to Congress to the close Of
the bond transaction sent at noon,
while Mr.. Belmont did not reach Wash
ington until = pm.
To Mr.. Vests question as TO why public
bond sale was reSorted to 1T a later date,
when the early sale was by private con-
tract. Mr. Carlisle said the first move was
due entirely to the emergency existing, and
to the disturbing reports, which were with
out shadow of foundation. that the gov
eminent had long contemplated bond
ISSUE
Mr.. Vests question turned to the Graves
bid. which was rejected. the amount of the
Graves award for 81 JoO.DO of bonds being
given TO the Morgan syndicate.
The Senator asked why, after the 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 Morgan syn
dictate under their blanket bid" Mr.. Car
Isle said that was matter of opinion.
and, in his Judgment the Graves bid was
rullity. after which the Morgan bid. which
was the next highest, took the bonds.
His action, he said, was taken after con-
Sulting 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 il the bonds had fallen?' in
terposed Mr.. Jones.
The Secretary answered that his course
would have proceeded without reference to
what the syndicate desired or would do.
He believed, however. that If the price of
the bonds had fallen he could have COM
PEELED the Morgan syndicate to take them.
No Inclination to Favor.
rs 1t not a fact" asked Mr.. Vest, that
because the syndicate had carried out the
protective clause, you were inclined to
favor them?"
Not in the least" declared the secre-
tary. emphatically. Il am not conscious
Of any such feeling
But you and the President were pleased
with the manner in which the protective
clause had been carried out?" Queried Mr..
Vest.
Yes; but I am not conscious Of the re-
hottest feeling of favor resulting"
Mr.. Walthall Of Mississippi went into the
question of how the negotiation with the
syndicate had been initiated. The Secre
tary's impression was that 1t had been in
itiated on visit Of Mr.. Belmont. At that
time, Mr.. Carlisle added, talks had been
had with many persons as to the possibili-
gency, and inquiries had been made
abroad. One of Mr.. Walthalrs questions
brought out statement from Mr.. Carlisle
as to the critical condition of the treasury
at the time the syndicate contract was
made. The fact was he said. that the
treasury had reached the point where there
were gold certificates outstanding for
which it had gold coin to meet them.
He had never stated this fact before.
Il suppose you never contemplated pay
Ing in silver?" inquired MIR. Vest.
Did Not Contemplate Paying I'm Silver
The Secretary answered that the present
policy of paying in gold had been followed
so long that he did not consider it expe-
dent to depart from it at time Of emer-
gency.
Mr.. Plat inquired as to current reports
that Mr.. Carlisle at one time had contem-
plated paying in silver. but that "it had
come to the ears of the President who said
it must not be done"
Mr.. Carlisle said he had heard Of these
reports and the statement that the Presi-
dent had overruled him had not a word Of
truth in it. The Secretary read author
lied statements Of the President and him.
self, showing that they were agreed on
maintaining the credit of the government
by gold payments. He referred incident
ally to some talk with Mr.. Vest as to sill
yer payments
Don't you remember" said Mr.. 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 avail
able, namely, to use the option to pay in
silver. and that you would do it II 1t was not
for the provision as to maintaining the par
ity?"
Mr. Carlisle said he thought this view as
to the parity expressed his views, although
he could not recall the exact conversation.
"Then, at that time," pursued Mr.. Vest,
"you did not claim that the gold payments
were in pursuance Of a policy established
by Secretary Foster"
Does Not Remember.
do you remember another converse
tion," continued Mr.. Vest, I'm which you
told me that you had seen the President
and he felt that when the holder of green
hack demanded gold he was entitled to it r.