The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1896-01-16
Dissolved Yesterday by a Letter
from Morgan & Co.
LETTER TO THE PRESIDENT
An Explanation of Why the
Syndicate Was Formed.
AND WHY TITS NOW DISSOLVED
It Wanted "All or None" Of the Bonds,
and When Bids Were Called
for, it Decided to
lake None.

for, it Decided to
Take None.
New York, Jan. 15.-The bond syn
dictate has been dissolved
Members of the Government bond
syndicate received in their mail this
morning, circular letter from j. T..
Morgan q Co, releasing them from
their commitments to furnish their
pro rata of 500, 100000 in gold and n
second $100,000,O00, taking their pay
ment therefor in a per cent. Govern
ment bond. Accompanying this letter
was a circular explaining why the syn
dicate was formed, what action was
taken on its behalf, and why it is now
dissolved.
"On the 23rd of December" Mr.. Nor
gan says, 81 was invited to Washing
ton for a conference. During my visit
there, no negotiations for loan were
even suggested, nor was there then nor
since any agreement or request that /
should take any steps preparatory to
making a contract. | came, however,
to the conclusion that the President
and Secretary of the Treasury would
use every power at their command to
restore and maintain the gold reserve;
that no steps would be taken till il was
ascertained what Congress would do;
that the Executive Department would
prefer to secure $500, 100000 of gold,
and that it was certain that no relief
could be obtained from Congress.
Upon my return, appreciating the
gravity of the situation, and in order
that ! might be prepared to act
promptly, took steps to ascertain the
what extent it would be possible to Sc
cure the cooperation of capitalists in
forming q syndicate which wouldagree
to sell the United States Government
$200,000,000 of gold coin. The con-
tract prepared and signed by the par
ticipants did not stipulate whether the
purchase would be by~private contract
or by 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be withdrawn from the Treasury, was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 con-
tract should be $100.000,000. The aD-
plications far exceeded my expecta-
tions. At the end Of three or four
days, the total of $500, 100000 was
reached, and / had 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
INTO four classes: People in Europe
who were prepared to ship gold TO this
side. institutions in the United States
in possession Of gold coin which want
ed bonds either for investment on as a
basis for National bank circulation:
third, banks in various cities which
hcre willing to exchange their gold for
bonds, expecting afterward to sell
them in the market; fourth. institu-
tions and firms not having gold but
which would get it at whatever cost,
provided the contract was pur in force.
Participants were about equally di-
yided between the four classes.
Having completed the syndicate, I
entered into negotiations in Europe,
and in places other than London, where
the market was closed to US, and
through the Deutsche bank and
Messrs. Morgan, Harjes d Co. Negotia-
tions were practically concluded for
public subscriptions In Germany,
France and Holland, which would
have resulted in a large amount of
bonds being placed in those countries.
ION January 4, realizing that the
tension was growing daily more scri-
Gus. / addressed a letter TO the Presi-
dent, calling his attention 10 hs sit
uation, and representa- that the
most important step was the rc>toIa-
ton of the government credit by re
r,la hi 4 ha ct nf toll
of what was proposed wr:c given and
assurances offered that the utmost ef-
forts would be nude to procure for the
Treasury 100000 ounces OF gold
The reason given for the dissolution
Of the syndicate is that the syndicate
contract called for a bid Of "ail or
none," and therefore Mr.. Morgan was
unwilling TO make Il bid under the
present circumstances as lie might
seem to present for considera ton bv
the Secretary OF the Treasury. the
throwing out Of smaller oids made in
good faith under the public call.
The only emergency in Mr.. Morgan's
Judgment. which would Justify such
IA course would be the failure of the
public to respond TO the call, of :he
government.
1t has been necessary 10 delay the
dissolying of the syndicate up to the
present time as every financial inter
est required protection afforded by the
knowledge that the syndicate was i'm
existence, prepared to make the loan
a success under any circumstances.
The circular cincludes: Il feel per-
fectly satisfied that there is no qucs-
ton as to the success of the loan"
The following is the text Of Mr.. Nor
gan's letter to President Cleveland
New York, Jan. 4, 1896.
TO the President, Washington, d. c.,
Sir;
1t is with great hesitation That !
venture to address You i'm relation to