St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1896-01-16
IT'S WORK IS ENDED
BOND SYNDICATE is An
NOUNCED.
MORGAN AND THE PRESIDENT.
STATEMENT THAT HE WENT TO
WASHINGTON BY INVITA-
TION.
CLEVELAND WOULDN'T SEE HIM.
His Offer to Furnish the Government
With Eleven and a Half Million
Ounces of Gold.

His Offer to Furnish the Government
With Eleven and a Half Million
Ounces of Gold.
NEW YORK, Jan. 15.-The bond syn
dictate has been dissolved. Members of
it received in their mail this morning
a circular letter from j. P. Morgan &
Co., releasing them from their COM
mitment to furnish their pro rata of
500, OOO,000 in gold, and second $780,
100000 if desirable, taking their pay
ment therefore in a 4 per cent govern
ment bond. Accompanying this letter
was circular explaining why the syn
dictate was formed, what action was
taken in its behalf, and why it is now
dissolved.
''On the 23rd of December" Mr.. Nor
gan says, Il was invited to Washing
ton for a conference. During my visit
there no negotiations for loan were
ever suggested, nor was there then,
nor since, any agreement, or request,
that L should take any steps prepare
tory to making d contract. ] came,
however, to the conclusion the presi-
ident and secretary of the treasury
would use every power at their COM
mand to restore and maintain the gold
reserves; that no steps would be taken
until it was ascertained what congress
would do; that the executive depart
ment would prefer to secure 5000, 900, 900
of gold, and that it was certain that no
relief could be obtained from congress.
Upon my return, approaching the
gravity of the situation, and in order
that l might be prepared to act prompt
ly, 1 took steps to ascertain to what
extent it would be possible to secure
the cooperation of capitalists in form
ing a syndicate which would agree
to sell to the United States government
$500, 600, 900 of gold coin. The contract
prepared and signed by the partici-
pants did not stipulate whether the
purchase would be by private contract
or public offer. The only provision,
in addition to the important one that no
gold should be withdrawn from the
treasury, was that the minimum
amount of the contract should be $780,
600, 900, the maximum not over 5000, OO0,-
600.
ALL Thai WAS w ANIED.
THE applications far exceeded my
expectations At the end of three or
four days the total Of 5000, 900 900 was
reached and L had full authority which
would enable me, whenever and how
ever 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 into four classes Peo-
pie in Europe who are prepared to ship
gold to this side; institutions in the
United States in possession of gold
coin, who wanted bonds either for in
VeStmen' or as a basis for national
bank circulation; third, banks in vari-
Gus cities who were willing to exchange
their gold for bonds, expecting after
wards to sell them in the market;
fourth, institutions and firms not hav-
ing gold, but which would get it at
whatever cost, providing the contract
were put in force. Participations were
about equally divided between the four
classes.
Having completed the syndicate, I
entered into negotiations in Europe and
the market was closed to us, and
through the Deutsche bank and Messrs
Morgan, HarjeS & Co negotiations were
practically concluded for public sub
scriptions in Germany, France and
Holland, which would have resulted in
a large amount of bonds being placed
In those countries. On Jan. 4, realizing
that the tension was growing daily and
had become serious, I addressed a let
ter to the president. calling his atten-
ton to the situation and representing
that the most important step was the
restoration of the government credit by
replenishing the stock Of gold Details
of what was proposed were given, and
assurances offered that the utmost eff
forts would be made to procure for the
treasury 1880, 900 ounces of gold"
WHY IT DISSOLVED.
The reason given for the dissolution
of the syndicate is that the syndicate
contract called for a bid of "all or
none" and therefore Mr.. Morgan was
unwilling to make a bid under the pres
ent circumstances, as he might seem to
present for consideration by the sec
rotary of the treasury the throwing out
of smaller bids made in good faith I'M
der the public call The only emergen-
cy, in Mr.. Morgan's Judgment which
would justify such a course would be
the call of the government. 1t has been
necessary to delay the dissolving of the
syndicate up to the present time, as
every financial interest required prOtec-
ton afforded by the knowledge that
the syndicate was in existence, pre-
pared to make the loan a success I'M
der any circumstances.
The circular concludes: 81 feel per-
fectly satisfied that there is no ques-
tiOn as TO the success of the loan
MORGAN TO CLEVELAND.
The following is the text of Morgan's
letter to President Cleveland
New York, Jan. T. 1885, 2l9 Madison Avenue.
TO the President Washington. d. c.
Sir: 1t is with great hesitation that I VEN
ture to address you in relation to the present
financial situation AS you are doubtless we'll
aware, financial affairs approaching a
serious crisis and the tension today is ex-
IRENE; and, whilst no outward evidences have
developed, we are likely at any moment to
reach the point and consequences which it
will then be too late to remedy. The gravity
of the situation must be my excuse
The most important step at the moment is
the restoration OF government credit by re-
placing the gold reserve in the treasury be-
yond question. This accomplished, con-
1idence both at home and abroad in the sta
bility of our currency will be restored. After
my recent visit to Washington / became con-
WINGED that any legislative action to improve
the methods at the disposal of the executive
was unlikely: in fact impossible. / there
fore took steps to ascertain whether it would
be possible to obtain the cooperation of par
ties at home and abroad to an extent that
would enable me to negotiate contract with
the government for the sale of II, 500 600
ounces of gold, approximating 5000, 900, on