Show COLLAPSE OF I THE SYNDCATE The Announcement of Its Dissolution Causes Surprise MORGAN TO THE PRESIDENT Got Discouraged After His Visit to Washington f The Reason Given For the Dissolution Dissolu-tion Accepted as the True One Since the Success of tlc Loan By Popular Subscription is No Longer Long-er a Doubt As Viewed By ar lisle Conditions For Purchase ol Bond Issue NEW YORK Jan I5The reasons given for the dissolution of the Morgan bond syndicate is that the syndicate contract con-tract called for a bid for all or none and therefore Morgan was unwilling to make a bid under present circumstances a ho might seem to present for consideration con-sideration by the secretary of the trea ury the throwing our of smaller bids bade In good faith under public call Only the emergency in Morgans judgment judgent which would justify such a course would be the failure of the public to respond to the call of the government I ha been I necessary to delay the dissolving of the syndicate up to the present as every financial Interest required the protection offered by knowledge that the syndicate was In existence prepared to make the loan a success under any circumstances Circular concludes I feel perfectly satIsfied I sat-isfied there is no Question as to the success suc-cess of the loan I The letter to the president to which I the circular alludes follows NEW YORK Jan 4 IS9G219 Madison I avenue To the President Washington I SIrIt Is with great hesitation that I venture to address you in relation to the financial situation As you are doubtless well aware financial finan-cial affairs are approaching a serious crisis and the tension today is extreme and whilst no outward evidences have developed we are likely at any moment I to reach the point and consequences which it will be then too late to remedy The gravity of the situation must be my excuse The most important step at the moment is the restoration of government credit by replacing the gold reserve in the treasury treas-ury beyond question This once accomplished accom-plished confidence both at home and abroad in the stability of our currency will be restored After my recent visit to Washington I became convinced that any legislative legslative action to improve the methods at the disposal of the executive was unlikely in fact Impossible I therefore took steps to ascertain whether i would Be possible 10 obtain the cooperation of parties at home and abroad to a extent that would enable me to negotiate a contract with the government for the sale of 1L500000 ounces of gold aproximating 200000000 on about the basis of the contract of February 6 18D6 In this effort I have been successful and am now in a position posi-tion to make such a contract for the full amount I do not hesitate to affirm in fact urge that such a contract would in every way be for the best interests of the government and the people and would be followed by less derangement of the money market of trade in fact of all interests including foreign exchanges all of which until recently were in such 3 increasingly prosperous condition and I urge your serious consideration of such a contract At the same time I recognize recog-nize the effect of legislation which has been proposed and the discussions thereon there-on in both houses of congress all of which might lead you to hesitate to make n private contract and consequently In view of the gravity of the situation I feel bound to say that if after a conference in which I can more fully lay the matter before you and without expressing any confidence in such a mode of procedure in face of previous failures of similar attempts at-tempts but recognizing as I do that the responsibility of decision lies with you I pledge to you every influence and effort ef-fort in my power to assist the government In its endeavor to make successful a negotiation ne-gotiation by public advertisement which shall result in the sale to the treasury af 11500000 ounces of United States gold coin 200000000 and further I will so far as I possibly can take such steps as will enable the syndicate which I represent rep-resent to join in making the negotiation successful to its full amount Awaiting the indications of your pleasure I remain re-main respectfully yours J PIERPONT MORGAN Received in Washington WASHINGTON Jan 15The announcement an-nouncement that the bond syndicate had been dissolved was received with surprise although among officials conversant con-versant with the changed situation no other course has seined open to Mr Morgan and his associates The reason rea-son given for the dissolution Is accepted ac-cepted a the true one since Mr Morgan Mor-gan and his friends are fully aware of the act that the success of the loan by popular subscription is no longer a matter of doubt To hold the banks mater to the terms of the contract it is argued ar-gued would prevent any of them from participating in the loan except in the capacity of a syndicate under which the changed conditions almost certainly certain-ly would result to their disadvantage Mr Morgans purpose therefore in releasing his associates it is believed is to give them an equal chance with other banks and financial institutions to secure whatever part of the loan they may desire The only criticism so far heard of Mr Morgans public statement is that his assertion that he was Invited to Washington for a conference is misleading mis-leading as the natural inference is that this invitation came from the president or by his sanction from some member of the cabinet This it is said is not the fact When Mr Morgan came to Washington the president declined de-clined to see him nor it is added did he confer with any member of the cabinet at the presidents suggestion I is stated on high authority that the president and Secretary Carlisle have received such assurances from a large number of prominent bankers throughout the country that there cannot I can-not be a doubt as to the loan being a success I I is argued that during the late break I in the market which followed the announcement I an-nouncement of tho governments attitude atti-tude on the Venezuelan question eastern bankers took advantage of the sharp decline in American securities and as a result their holdings are now large and must be protected from a further decline which would necessarily follow the fail ure of a loan or the depletion of the reserve re-serve to a point so unfavorable as to effect the market Under these circumstances it Is believed that should a large export movement set In before the loan is consummated the largo bank and other financial institutions in-stitutions would neutralize the effect by making deposits of gold In any event the officials here are not apprehensive of any serious difficulty In matwI the reserve at about its present figure nor in placing the 5100000000 loan at a fair price both to the government and to the purchasers The only serious question lon Involved in the situation it is said is from what source are the bond purchases pur-chases to obtain their gold and If from the banks as seems altogether probable as to a very large percentage of it will not the banks eventually recoup their reserve re-serve holdings by withdrawals from the treasury CARLISLES VIEWS Secretary Carlisle this afternoon in speaking of the dissolution of the syndicate syn-dicate said he could be quoted as saying say-ing that the success of the loan was assured Further than this he declined to make any statement The treasury today lost 330000 principally for export and received deposits amounting to 5250 000 making the net loss for the day of SHOOOO CONDITIONS FOR PAYMENT Secretary Carlisle tonight made public the following circular modifying the conditions con-ditions for payment on the advertised bond issue Treasur department office of the sec retary Washington January 15 1S9S Treasury circular No3 1896 dated January C 1896 inviting proposals for the purchase of one hundred million dollars dol-lars 100000000 of United States 1 percent per-cent bonds is hereby so modified that after the payment of the first installment ment of 2 per cent with accrued Interest Inter-est as required In said circular the remainder re-mainder of the amounts bid may be paid in installments of 10 per cent each and accrued interest at the end of each fifteen fif-teen days thereafter but all accepted bidders may pay the whole amount of their bids at the time of first installment and all accepted bidders who have paid all installments previously maturing may pay the whole amount of their bids at any time not later than the maturity of I the last Installment Accepted bidders I who pay the whole amount at the time I of the first installment or any date thereafter there-after as above provided will be entitled to receive at the date of the payment the whole amount of bonds awarded to them and accepted bidders who pay by installments in-stallments will be entitled to receive at the dates of such payments the amount of bonds paid for J G CARLISLE Secretary |