The Washington times., 1906-07-19
SHAW IS UNDER
BANKERS FIRE
Charge His FlOtatiOn of Pan
anna Bonds Has Cornered
u. S. Is of 1890.

NEW YORK. July l9.-The New York
Commercial says today:
Leslie NJ Shaw. Secretary OF the
Treasury. Is coming in for a good deal
OF criticism on the part OF bankers in
connection with the fiotation of the Pan
anna canal bond issue. the result Of
which has been. so bankers declare. a
virtual corner IN the Government 2
per cent bonds OF 1880. These bonds
have been unusually active during the
past few days, and have advanced a
full ~ per cent within a week.
Inquiry among several financial insti-
tuti.ns yesterday revealed the fact that
the market was practically bare Of Of
ferings Of the 2 per cent bonds. the
quoted price of which ruled around l04as
as compared with 1885 week ago.
Corner in Government as.
A prominent banking house here made
an effort to secure a block of the bonds
and out of seven sources applied to they
were able 70 secure quotations from
only two who had bonds 10 dispose OF.
One OF these was a prominent bond
house, which had only an odd lot. and
the other was the National City Bank.
The quotations. as stated. ranged
around l049s
81 5eral prominent bankers seen yes
terday who. however. did not wish 70
be quoted for reasons that are obvious,
were loud in their denunCiatiOns of the
method which SHo Secretary of the
Treasury has pursued In facilitating
the sale of the Panama bonds. ITO my
mind" said q prominent hnancier, 1t
IS a piece of rank stock JObbing. The
post of Secretary or the Treasury is
a dignihed one, or, rather, IL should be,
. Of n al 90
banks making immediate delivery OF the
. per cent bonds, which apparently is
for the purpose OF lacking up the
market TO aid IN the distribution Of the
Panama bonds, savOTs too strongly Of
stock market manipulation TO be con-
sistent with legitimate banking prin-
ciples.
Government per cent bonds IA the
street for what We call spot delivery,
and the inference is that somebody has
had advance information. run the price
OF the per cents up at least a point
and a half, and created what IS vir-
tually a corner In them"
Another feature which bankers criti-
else Is the offer of the Secretary TO al
low the highest bidders for the Panama
bonds 20 increase the amount Of their
purchases. The qualification that this
will not be exercised 10 the prejudice
OF anyone who has bid above 1O9ih, q"
bankers declare means little or nothing
1t is pointed out that the large banks
WILL under this clause, still be able 10
secure the entire issue
Award May Surprise.
Indeed, the opinion was expressed In
some quarters that the awarding Of the
bonds might disclose something OF a
surprise This latest phase Of the situa-
ton. 1t Is argued. is decidedly unjust
and practically eliminates the smaller
local banks and out-of-town banks from
participating IN the issue. The Secre-
tary already has let IL be taCitly under
stood that about 1O4 Is expected to be
realized for the bonds.
The heads OF several large bond
houses said that so many circulars had
been issued In reference to the matter,
iniecsing so many new features therein,
that it was difficult TO determine lust
wherA tha- were at" There was a
unaLfmity Of opinion upon one point
however. E.ud that was that il was un-
fair to the smaller Institutions and that
the stock jobbing" feature Of it was
TOO plain