The Birmingham age-herald., 1915-10-03
HOW THE BIG GOLD
 POOL WAS HANDLED
John Sherman While Secretary of Treasury Inaugurated New Plan for Handling Big Government
 Loan
By HOLLAND

large sum of money. but if the co-opera- tion in the underwriting be-as it Is expected to be-far reaching and nation wide. then the proportionate part of this tota, of $10,000,000 which each subscriber to the syndicate is to receive may not be very large. When the amount of work Is to be done by the committee into whose hands the management of the syndicate | is placed is considered, then it can be | understood that the remuneration is not ] excessive although in the aggregate it | is $lOeOO,O00 The committee will earn whatever 1t receives. k
 There will be vast amount of labor performed until the loan is exhausted, and this will entail an effective organiza- | tion. The necessity for this labor arises, according to statements of competent authority, from the manner in which the loan is to be handled. As an example of the method, which presumably is to lle adopted. it may be worth while to refer to the method perfected by John sherman. while Secretary of the Treas ury at Washington, by means of which he marketed the government loan which was issued for the purpose of making the | resumption of specie payment certain and easy
 Secretary sherman called for subscrip | tions to the bonds and received imme- diate favorable responses so that at an early day he was able to contemplate full subscription. He caused 1t to be known | to subscribers that he would not call l at once for the full amount of their sup- scrption, but he expected that they would | enter to the credit of the government up- on their books the full amount of this l subscription. He also intimated that he l did not intend to call upon the banks 1 for any part of their subscription unless | he gave 30 days notice. At the end of the 30 days he would draw upon each bank an amount proportionate to its subscrip- | tion, and in return therefor the bank would receive a corresponding amount of bonds. In this way, the placing of the loan was facilitated and the method, al- though not new, proved to be entirely | satisfactory
 While there is no authoritative state ment grading the method that will be adopted by the managing committee of the underwriting syndicate which will have iii cherge the underwriting of this loan, still it seems to joe the general impression in the financial district that if a bank in Detroit or in Ninneapo:;s-us-
 
 lustration-has subscribed s10O,0O0 as mem- Der of the underwriting syndicate, it will enter that sum to the credit of the managers of the syndicate. Then when a payment to American exporters Is to De made on account of the loan the mana gers will draw for the proportionate part of the banks subscription and in return therefor bonds of like amount are to be turned over to the bank. Therefore, it is easy to see that when the amount is as great as $5,0OO,000, and when the syn dicate which has underwritten 1t Is na- tion-wide, a great deal of labor Is en- tailed, so to speak, by which this loan Is made available.
 Where Will the Money Come From
 One of the observations most common ly made in the financial districts when this loan was under discussion relates to the proportionate amount which the New York members of the underwriting syndicate would subscribe to the aggre- gate of s500.0 900. Probably there never will be an authoritative statement which will show in detail what New York sub- lscriptions and what all of the other sub- scriptions were. There are several req. sons why it has not been expedient tt make publication in detail of the subscrip. tions. One of these reasons in itseli that subscriptions would be the more easily obtained if there was nC publicity concerning them.
 In scme sections of the country there is some sensitiveness upon a subject oi this kino. X bank might subscribe $100, 900 if 1t were not known that it had mad l a subscription of that kind. If it wer known there might be comparison witt the subscriptions made by other banks l When the $100.000 900 gold pool was or ganzed, little more than year ago every national bank with two or thre | exceptions, having become membe of the syndicate, there was no genera knowledge in detail of the amount sub scribed in each instance. It was. how ever, the common impression in the flnan cial district that the proportionate par borne by the New York members of tn syndicate was about 70 per cent of tn whole. If that surmise was correct, theJ New York city contributed H0'000,000 t the gold pool, while other parts of tn country contributed $30 ,OO0. In viev of the fact that only two or three week.
 earlier the banks of New York had co operated as an underwriting syndicate il furnishing $100,000.00 900 of gold for the pur pose of facilitating the payment by Ney
 York city of its pending obligations i Europe, it was spoken of at the time a a fine example, not only of strength. bu
 of courage and public spirit character
 stic of the New York banks that the
 should have contributed in about
 months time $l70.O00.000 in gold for tn
 purpose of easing up the intense strai
 occasioned by the sudden outbreak 0
 war.
 It seems to be the opinion commonl
 held that some of the smaller financis
 centers will be likely to subscribe large amounts, relatively speaking, to the syn
 dicate underwriting than some of tn larger centers. For instance, the surmis is general that the Minneapolis distric
 will subscribe a larger amount, still rela lively speaking, than Philadelphia. It ha
 been observed that 1t Is easier to secur
 subscriptions of this kind in Boston tha
 in Philadelphia. although there is n
 doubt that Philadelphia's contribution wi
 De entirely satisfactory.
 There has been general and approvin
 comment upon the intimation that tn
 underwriting syndicate has = SS,ll con
 init itself to another obligation of thi
 kind should one be needed by Englan
 and France after the present loan is ex
 hausted The inference ls strong that tn
 understanding represents sort of con
 promise; for when tn Anglo French con
 missioners began the negotiations in Ne
 York they are presumed to have suggeste
 that Q.00O.000.000 be the amount of tn
 loan. Now they have accepted $5OO, O00 %
 with the understanding that if after tn
 money be exhausted there is still nee
 for fresh supplies they can secure ar
 other $5O9. .00O.000 upon like terms in tt
 United States, making $1 $1.00O,co00O0
 all