Evening journal., 1910-08-09
NEW NEWS OF YESTERDAY
The Loan That W. H. VAN
derbiIt Was Refused
BY "HOlIand."
BY "HOlland."

II was at the time of the panic of
1884. occasioned by the exposure Of
the fraudulent practices Of Ferdinand
Ward of the firm of Grant and Ward
and the consequent failure of one or
two New York banks. Credit shriveled
instantly; no loan could be obtained
except upon the very highest kind Of
collateral security.
At the height of this crisis William
H. Vanderbilt, who had been the head
of the Vanderbilt fortune and enter
prises since the death of the commo-
dore, in 1878. found it necessary to
morrow a large amount of money. He
had abundant collateral security, both
bonds and stocks, which. under ordi-
nary conditions, would have been re-
garded as gilt edge. Ordinarily, too.
with his hundred millions of wealth
behind him. his name upon the back
of a note for a million dollars would
have secured the instant discount of
the note 1 many bank of the country
which had available funds. Yet, when
Mr.. Vanderbilt came to take up the
matter of securing the loan he desired,
he was told that If it we're made to
him the collateral would have to be
nothing more nor less than govern
ment bonds.
Mr.. Vanderbilt did not complain. He
realized fully the wild disorder in the
money market, and then, too. he had
the bonds. They were ten-thousand-
dollar bonds. They we're quoted above
par. They were practically as good
as gold the world over. They would
have been instantly accepted at their
face value in London or Paris. Yet
the subordinate who was negotiating
the loan for Mr.. Vanderbilt was fin
ally compelled to stand in his pres
ence and report:
'Mr. Vanderbilt, Mr.. King will not
not accept those United States bonds
as security for the note"
The head of the Vanderbilt fortune
looked the astonishment he felt.
Edward King. of the Union Trust,
will not accept government bonds as
security for a loan?" he repeated
slowly, as If not fully comprehending
for the moment what the o~cer had
reported TO him. Then he, fared up.
"Am / to be turned down in this
way?" he cried as. possibly, thoughts
of the contents of his strong boxes
swept through his brain. IF gov
ernment bonds are not good security
are not the very best security-bonds
! that are quoted above par and are
accepted at their face value for gold
! the world over-then how are any
loans to be obtained?" He rose from
| his chair and walked angrily up and
] down the room What is the matter
with the bonds?" he asked lat last.
"Mr. King says he won't accept gov
ernment bonds of the denomination of
/ ten thousand dollars. He says II you
want to make the loan with his bank,
you must offer as security govern
ment bonds each of the face value of
one thousand dollars. He won't give
any reason why he makes such pro-
viso"
"He says that, does he?" exclaimed
| Mr.. Vanderbilt. well you tell him
I for me that I will not accept any
such ultimatum from him or anyone
| else and that will arrange to make
/ the loan elsewhere"
That Mr.. Vanderbilt did, and he met
with no especial difficulty in getting
! the sum he wanted with his ten
thousand-dollar government bonds as
security. It was the first and last
time that Mr.. Vanderbilt was eyel
turned down, and it was probably the
| first and last time that any banker
ever refused as security a government
bond of a certain denomination. In
deed. in all respects. Mr.. kings
/ proposition TO W. II. Vanderbilt may
! be called the most extraordinary
proposition, as regards security fo'
a loan, ever made; and for a banker
of great reputation such as Mr.. Kine
bore throughout the nation, to refuse
bonds of the denomination of ten
thousand dollars and yet promise tc
accept bonds Of one thousand dollars
face value each reflects one OF the
most curious conditions ever known
in the history of American banking.
/ Copyright. 1910. by e. j. Edwards
lAll right reserved)
Tomorrow Mr.. Edwards will tel
Of "The Ruse That Made General Me-
Clellan n Governor"