New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1896-02-19
DEFAULTS ON BOND BIDS.
THE GRAVES CASE THE ONLY ONE
KNOWN AT THE TREASURY

WHICH REQUIRE CONSIDERATION OF THE
MORGAN sYNDIcATE's CLAIM. ALTHOUGH
HIGHER OFFERS HAVE BEEN RE-
CEIvEp - NO DECISION YET
REACHED By sEcRE-
TAaY CARLISLE.
fpy TELEGRAPH To THE TRIDuNlI
Washington. Feb 1s-No decision has been
made by Secretary Carlisle touchinS t'i' "i'o.
ment of that portion Of the per cent loan WIZ"
IS in default by reason of the failure o. th' per
sons to whom allotments were made 10 ueposi'
the required 20 per cent upon notihcatioh Oh ac
ceptance of bids No decision VIII De i"auc
until It has been ascerta!ned what amount ~ III
default Instructions have been sent " '"'
Treasurers TO report all failures on the part Oh
e,hscrihers TO make the required deposit, and
thus far the Graves bid for %,50O.OOO Is the only
one known to be in default A communication
hoo ho.n received from j. Pierpont Morgan. ask
ing that all bonds not awarded to bona fde SUD-
scrihers be allotted to him and his associates
under their bid Of O6S77. a large number OF OF
fore wore also received at the Treasury Depart
mcnt to-day to take the defaulted bonds at
0curee generally above 112, the greater numper
bcirc offers to take small amounts. 1t IS eX-
nected that reports will he received WITHIN lie"
DAYS from all Sub-Treasurers as to the FAILURES
n comply with the Treasury requirement ior '"e
first payncrts, and until these reports are ie-
cclved. no action will be taken by the secretary
Secretary Carlia. said to-day that he would
give careful consideration to the matter p'ioic
making n decision. 50 FAR as he was ihioi'nei'
the Graves bid was the only one In default' anu
he is inclined to believe that II other detau''eu
bds are discovered. the amount thus covered VIII
be comparatively trihing
ARGUMENTS FOR THE MORGAN CLAIM.
Taking what may be termed a popular we"
of the question which mus. be decided 1t would
seem that the pecuniary interests OF the treas
urv demand that the claim or the morgan"
syndicate for the defauted bonds AT 'helr 40"
bid should not be allowed. Secretary Carnsne
admits that there may not perhaps De any
LEGAL obligation resting on the treasury ~
o,yord these bonds to the Morgan syndicate,
I'm, tbere arc considerations of equity and
fair business dealing which enttle the Morgan
claim TO serious attention. Mr.. Morgans bid
WAS for the "a tire loan o, any part tHereol'
Allotment was made to every bidder whose fig
uros were above those Of Mr.. Morgan, ana each
received the full amount subscribed for The
remainder went to Mr. Morgan because his was
the next best bid. Under the terms or the
Treasury circular inviting proposals bids were
received up To- a fixed date The opening OF
bids and allotment OF bonds closed the trans
action and TO accept further bids now for any
unassigned portion OF the loan would be If
regular. unbus.nesslke and unfair to bona noe
subscribers IN ts dealings with reputaole
bankers tho Government. 1t il thought, cannot
take advantage of trIninG technicaities, and
resort to the sharp practice Of the street mercy
..,,1 ff,alf
THE GRAVES OFFER.
In common with other subscribers. with
tho single exception Of Graves. the Morgan syndl-
cn,c has implied with the requirements OF the
Treasury circular Those TO whom bonds We're
all.tt.d received the full amount subscribed be-
for. IN. Morgan bid was reached and the re-
rnalnier was assigned 20 the syndicate. Inc
Graves offer has turned out 10 be a paper oner
merely. and Il Is question therefore whethcr
the bonds thus placed In default were not prop
.rlv portion 81 the remainder for wh'ch 'he
Moran syndicate bid and 10 which II woulu nave
been Internationally entitled had the Graves pa
h.e, thrown out before aotments were made
When the Graves bid was opened ana examined
tho committee suspected that II came from an
IRRESPONSIBLE person and the attention OF Secie-
tary Carlisle was directed to 1t. Graves gave no
ton a, Ncw-York. and stating that II pohds
eb,ud no allotted 70 him they were TO he delivered
q, <ev,-y York and San Francisco An inquiry
made hy the Department IA to his hnancnI
standing brought n response not entirely satis-
factory vet not 81 character 10 warrant su"-
mary rejection OF his offer. Therefore the Secre
tary gave the benefit Of the doubt u the "o'e'"-
n,ent AS the amount subscribed was larse u,iu
the price among the highest offered. ana a"arueo
| 10 Graves the full amount subscribed ,,,,,.-
THO hid WAS made In the names or Nlilaih
Graves and associates" II IL pronapie wa !,
tito mention Of associates was what deiehteu
Graycs's well planned speculation lhr 30
eociates'' could not be produced when the OPP
ton was offered for sale, and as those 10 "io'''
the tender was made were not WILING 10 puy
lawsuit with the option, sa,e couIu Nv. w
arranged. If the dcfaulted bonds 90 not prop
| erIv belong to the remainder to which the MOT
gan syndicate was entitled, then the Secf.,'i'
mat either invite further proposals Tor these
/ honds or sell them IN the open market Tor such
urices as can be obtained. and in such parceiS
| as may be taken by purchasers. In either oon !,
tingency # is highly probable those VINO Mouiu
| sccurc the bonds would draw from the treas
| urv the gold with which to make payment IL
! is true that the Government would gam Few
thousand dollars by pursuing THIS course put
| vnuld NOT the Treasury be acting IN the III
| terost OF IRRESPONSIBLE spectators. ana wouiu
not every reputable banking house regard such
a proceeding violation or every prihciple
of honest dealing which obtains among hoHoi-
| able men? Would It be wise. apart from any
| consldera ton OF commercial and business ethics
| Tor The Government to forfeit the confidence
and excite the hostility Of the reputable BANK
| ing interests merely that few thousand DOL
| lars might be gained thereby?
| DEPOSITS OF, THE SYNDICATE
| Besides It Is doubtful whether refusal TO
allot the defaulted bonds to the Morgan syndi-
cate would be advantageous to the Government
The syndicate has deposited about S2O,ooo,ooo In
gold In the Treasury, not one dollar or when
was previously drawn therefrom. The re-
naming payments Will be made in like manner
and in good faith If the Governmene performs
| an act which would be held to be IL violation
of fair dealing. the respect OF reputable bank