Evening journal., 1913-06-26
NEW NEWS OF YESTERDAY
The Wonderful Financing
Of a Secretary Of
the Treasury
~ uOnand.

Il doubt whether the few words Of
warning which Governor Charles
Foster spoke at a banquet in this
city shortly before the end of Presi-
dent Harrison's administration, in
1898, would have attracted the atten-
ton # did had it not been for the
very great reputation Foster gained
for a monumental piece OF financing
which he did year earlier as secre-
tary Of the treasury"
So said the late Frederick d. Tap
pen, who was for many years one OF
the leading banking authorities OF
the clearinghouse association OF
New York during the very trying
panic days of the summer of 1898.
Il don't think the country on the
whole realized what the feeling of
leading bankers of the United States
was when President Harrison called
Governor Foster to the treasury de-
partment as the successor of Secre-
tary Window" said Mr.. Iappen.
Foster had been out OF public life
for some ten or fifteen years. II is
my impression that he had been
himself in some financial embarrass.
ment, due, however, to no fault OF
the bankers of the United States
who were glad that President Harri-
son named him as secretary of the
treasury in 1889 for Window had
done one of the most brilliant strokes
of modern financing when he was
80 H..
fld's cabinet eight years earlier. He
had. almost by a stroke of the pen
refunded a very large amount OF
government bonds bearing 5 per cent
interest by the simple cxpedient OF
extending these old bonds on a
per cent interest basis. II was a mag
nfcent piece of work and il was done
under his own discretion, when sec
retary of the treasury.
Bankers all over the United
States we're wondering what Win
dom would do nine years later, hen
during his second service as secre-
tary of the treasury he was con-
fronted by the necessity of taking
care OF fifty millions of government
bonds bearing 1-2 per cent. interest
They were to become due. I think
about 1890.
Secretary Window died just about
the beginning of the third year OF
President Harrison's administration
The President brought Governor Fos-
Ter out of his brief obscurity in Ohio
to the treasury department as Win
dom's successor.
"The great question with bankers
was What Secretary Foster would
do with the fifty millions of 1-2 per
cent. bonds He knew that Secre-
tary Window had been seriously con
sidering a plan for refunding these
bonds at a much higher rate Of in
terest. Window was an experienced
financier He had had a long expert.
ence in the United States Senate
He had been Governor of Minnesota
He had been twice secretary of the
treasury. Foster had been Governor
of Ohio and was for a time promi.
nent as a member of the lower House
OF Congress; but he had been for tel
years out OF public life
81 remember my feeling of deligh
when I first heard that Secretar!
Foster had worked out a plan foi
taking care of the new 1-2 per cent
bonds He offered TO extend thes'
bonds. provided the holders of then
were willing to accept per cent. in
terest If these holders would no
accept this rate of interest then, the!
were informed, they could offer thl
bonds to the treasury department an'
they would be paid off.
1t was q very daring proposition
because no government securities II
this country, or, I think in Grea
Britain, with as low a rate of in
terest as per cent. we're ever of
fered. But Secretary Foster was sue
cessful He actually extended twenty
four millions Of these bonds on a
per cent interest basis and he pai
off twenty-six millions.
This exploit gave him high rep
utation, although l afterward
understood that this was a plan whic
Secretary Window had in mind
And it was for this reason tha
when in the early winter of 1898, Sec
retary Foster said in a public addres
that It might be necessary for thl
government to sell bonds in order {
/ replenish the treasury gold, his warn
/ ing was taken very seriously. for h
! had justified our confidence in him a
a man of very great governments
financing ability"
Copyright, 1913, by r ]. Edwardl
All rights reserved.)
Tomorrow Mr.. Edwards will te
"How President Arthur Rebuked
-.