The sun., 1896-01-16
PRICE TWO CENTS.
BOND SYNDICATE RETIRES.
IT COULD NOT ACT UNDER THE
TERMS OFTHE TR EASURY CIRCULAR

TERMS OFTHE TR EASURY CIRCULAR
MIR. j. Il. Morgan Gives nm Interesting Hts
tory OF HIS Efforts to Assist the Treas
ury and Tells of New Forcin. Market
for Our Bonds 80 Interesting Questions
Raised by tho Dissolution or tho syndi-
cate-The Gold and Greenback Premium.
Subscribers to the Government bond synd-
cate received in their mail yesterday morning
formal notices from J. p. Morgan & Co.. releas-
Ing them from their commitments. The no
tices were accompanied by tho following circu-
lar letter from Mr.. Morgan:
aga WALL STREET. New YORK.
Jan. a. 1906.
"GESTLEMEN: In sending you formal notice
OF tho dissolution OF the United States Bond
Syndicate In which you have cooperated. It 10
proper that ! should mako some statement
showing why the syndicate was formed, what
action has been taken on Its behalf. and why 1t
s now dissolved.
"On the 23d of December last, was invited
to Washington for conference. During my
visit there as have verbally stated to every
one who has conferred with me on tho subject,
no negotiations for a loan were commenced or
even suggested, nor was there then or since any
agreement or request that should take any
steps preparatory to making a contract.
THE result Of my visit was that camo to tho
following conclusions:
"First--That the President and Secretary OF the
Treasury determined to every power at their
command to restore and maintain tho gold reserve
"Second-That no steps would be taken any
preparatory negotiations commenced until It
certained what action. II any. Congress would be
likely to take in response to the appeal of the
dent for adequate and improved means for making
| such restoration.
"Third-That tho Executive Department would
prefer II possible. to secure 5000 100000 OF gold in
order to avoid any probable necessity for similar
negotiation before tho meeting of the new Congress
| in 1897.
"Fourth-That It was absolutely certain that no
adequate relief could be obtained from Congress- and
that bill could bo passed through the Senate for
| the improvement OF the monetary system OF the
| country.
Upon my return. appreciating to the full the
gravity of tho situation. and keenly alive to tho
fact that early action was essential and In order
that might be prepared. IL called upon, to act
| promptly, took steps to ascertain to what ex-
| tent 1t would be possible to secure the coopera-
ton of capitalists, institutions, and others in
forming syndicate which would agree to sell to
the United States Government $500. 900. 900 Of
| gold coin.
I'm my efforts. while far from sangune as to
the result. the ready acquiesence Of James Still
| man, ESQ.,. President Of the National City Bank,
| New York: Edward d. Adams. ESQ.,. with full
| power representing tho Deutsche Bank Of
| Berlin. Germany: John A. Stewart, Esq, Presi-
| dent United States Trust Company: Pliny Fisk
Esq. Of Messrs. Harvey Fisk & Sons. and
others. to all of whom am deeply grateful. en-
| couraGcd me to proceed.
| The contract, as prepared and signed by tho
| participants. did not stipuate whether the pur-
! chase should be by private contract or by public
| offer. The only proviso lin addition to the i'm
portant one that no gold should be withdrawn
from the Treasury was that the minimum
amount Of the contract should be SlOO. .OOO. 900.
ahd the maximum. the full amount Of partici-
pations which might be secured before 1t became
necessary to act. not exceeding 5000. 100000.
Tho applications for participation far ex-
ceeded my expectations. At the end of three or
four days the total of 10000, 900 was reached.
and l had in my hands full authority WHICH
would enable me, whenever. and however thu
| Executive might decide to act to secure that
amount Of gold for the Treasury reserve In eI-
change for United States bonds.
Tho participants may be divided into four
classes:
| First-Institutions. banking firms. and others in
Europe who prepared. II necessary, to ship the
amount OF their participation in gold TO this side.
| "Second-Banks. savings banks. trust companies.
and private individuals throughout tho United States
in possession OF the actual gold coin who desired to
secure bonds either for investment . basis for
| national bank circulation.
| "Third-Banks in New York, Chicago Boston. Phila-
delpha, Cincinnati and other cities in possession OF
gold who. without necessarily desiring bonds for In
vestmont. were willing to aid in tho movement TO
sustain the and exchange their gold
for United States bonds expecting afterward to sell
| tho same In the market.
| "Fourth-Institutions. banking nrms and Others
who. without being in possession OF the actual gold
wers willing and able to obtain that gold. at what
over cost for deposit with the Treasury in payment
| for bonds. provided tho movement contemplated
| could be carried out.
| II may add for your Information that the
| 100000. 900 participations wore about equally
divided between the four classes indicated.
"The formation of the syndicate being COM
pleted commenced negotiations for tho perms-
nent placing OF portion of the loan by public
issue in Europe should a contract with the
| Government be made.
"The London market WAS unfortunately
closed to us. owing to causes to which need
not refer. ] therefore. through tho Deutschs
Bank. Berlin. and Messrs. Morgan. HarJes d
Co., Paris. opened negotiations for public Issues
in Germany. France. Holland. Belgium, and
Switzerland. which negotiations were practi-
cally concluded. and, had 1t been possible TO
proceed further. doubtless very large amount
in bonds Of small denominations would have
found permanent place in those countries, TO
the great advantage Of every interest
After waiting few days for some announce
ment or invitation from Washington. and realiz-
ing that every days delay was serious in the
face of the growing tension in hnano al Affairs.
on Saturday. Jan. 4, l sent by messenger the
following letter to the President.
NEW YoRx. Ql9 MADISON AVENUE, Jan. Z, 1895.
" To the President. Washington, d. c.
.sIR; It is with great hesitation that venture to
address you relation to the present financial situa
| tion.
AS you are doubtless well aware. financial affairs
nre approaching serious crisis, and the tension to-
day is extreme: and while no outward evidences
have developed. we are likely at any moment to
reach the point and conssque which II will hen
bc 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 replacing tho
gold reserve In the Treasury beyond question. This
nnc, nrcomniishpd. confidence both homo ana