New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-09-09

enter into syndicate agreements? asked Mr.
Hughes.
Yes" Mr.. Clafin replied
do they come before the subcommittee"
NO; they come before the whole finance COM
mittee The quorum of this is the majority.
Written agreements are drawn up and a synop-
sis of them Is recorded in the minutes of tina
finance committee"
Does the New-York Life enter into syndi-
Gates when it does not take the bonds itself?'
TT never enters into syndicates unless salts
fed it is good thing for the New-Yorz Life 10
hold bonds the syndicate handles 1t never
enters syndicate transactions except with the
intention Of taking bonds"
AS TO JAPANESE BONDS.
Mr. Hughes asked explanations of some trans
actions in Japanese 6s. first series. The COM
pany received 80 $50 from syndicate managers
for profits of syndicate Evidently. Mr. Hughes
pointed out. the Nev-Tork Life receiving
its share of the pro1t of the syndicate members
from the profit made by sale of the bonds to the
public
Next the Wabash. Pittsburg Terminal $500
OO0 bonds were considered. There no
call" and the syndicate Of which the New
York Life a member received a share Of
the profit from selling bonds TO the public; al
though, Mr.. Clafin pointed out. 1t put up no
money
So too. in November 1894 a profit of $40
COS was obtained from 100000 Of the
Oregon Short Line As there being no call"
On November Il. 1904 in japanese Is. second
series the New-York Life participated to the
extent of f1O0OOn There was no call and
therefore the New-York Life took Of the
bonds by withdrawal and if it acquired any of
them it must have acquired them in open mar
ket The syndicate was formed by Kuhn. Loeb.
& Co The price was s5lz with interest in Lon
don and s:14 with interest in New-York-
Mr. Hughes showed that. though the New
York Life did not withhold from the market
any OF its syndicate holdings it afterward went
into the market and bought much more largely
than it had originally. thereby adding to the
syndicate profits
Mr.. CIafin. however. explained that Japanese
6s varied much in value. and the bonds might
have been sold by the syndicate time and
repurchased by the New-York Life at another
under quite different circumstances
ATLANTIC COAST LINE BONDS.
Next the participation of the New-Tork Life
10 the amount of 81. 100000 in the syndicate that
handled bonds of the Atlantic Coast Line was
taken up Mr.. Clafin said he could not remem-
Der the details of the transaction
The managers of the Atlantic Coast Line wers
issuing s1OOO0OOO bonds to leading banks OF
u per cent and later at "a less ! per cent. The
finance committee of the New-York Life au-
tbo-ized the treas surer to take So 600 900 OF thess
bonds
The collateral of the Atlantic Coast Line was
Louisville and Nashville stock. There
syndicate formed by the New-York Life and
others for purchase Of s5,O0O.OOo of the Louis
Vile and Nashville stock
o.-Does the New-Tork Life have debentures of
C-They ought to be very closely examined2 A.
Yes: some debentures very good like the United
Or your own? A-Yes. or my own But
sometimes should hold debenture as better than
r rule. s.S' ---''' S'Ss' '''N - '-'eA' '-'@' =
Witness and the counsel then argued as to
the value Of debentures as Investments Mr..
CIafin insisting that q good debenture Is
better investment than poor first class mort
gage He cited the great corporations and the
virtual impossibihty Of imagining their failure.
Corporations don't die" said Mr. Hughes.
but they sometimes merge
Mr. Hughes returned TO the Atlantic Coast
Line syndicate with the Louisville and Nash
vile collateral
DEAL WITH J p MORGAN.
The Nev-York Life paid s1.ss4sS6 81 to J. p.
Morgan & Co. for their s2.oOe00o participation.
L was n purchasing syndicate 10 purchase Bonds
from the original syndicate At the same time
the Nev-Yo-k Life was in the syndicate man
aged b. Harvey Fisk & Sons. This second syn
dicate purchased Atlantic Coast Line bonds
from J P Morgan & Co. to support the mar
ket and 10 this the New-York Life paid
ss42 6oe
In both these deals. Mr.. Clahn said the New
York Life made a profit. He said emphstically.
in answer to the question as TO the vaiae Of
the holdings Of the New York Life.
IF the New-York Life were 70 dispose q
its holdings carefully and slowly. aa an indi-
vidual would. 7 have doubt that all such
holdings could be sold a price equal 70 that
for which they we're purchased
Considering these syndicate transactions. a.
a whole. Mr. Clahin stated that the advantags
OF all this machinery was that the bonds would
not be put on the market at such price and in
such a way 10 depreciate the price. 10 q pur-
chasing syndicate viii guarantee to hold the
bonds for a year and sell them only under GER