"We subscribe for one million four per cents. Certificates of deposit by mail to-morrow."
From National Bank, State of New York:
"Please forward immediately one million more United States four per cent. consols, making a total, together with former subscriptions, of ten million five hundred thousand."
I sent the following telegram to the First National Bank of New
York:
"Your telegram covering one hundred and ninety million consols staggers me. Your telegram for twenty-five million received, and entered at two o'clock. About thirty million from other parties were received and entered before your last telegram. Will wait till letters received. What is the matter? Are you all crazy?"
On the 18th the bids were carefully analyzed and accepted in the order in which they were received. The bid of the First National Bank was made on the behalf of an association of banks and bankers. I declined their offer for refunding certificates and accepted their offer for $111,000,000.
I wrote to Conant, April 18, as follows:
"Since I wrote you the letters yesterday respecting the recent circular of April 16, I have sold the whole of the $150,000,000 of bonds offered therein; $39,000,000 were sold to sundry banks in the city of New York, and the residue, $111,000,000, were sold to an association of banks and bankers through First National Bank. This unexpected and agreeable denouement of our refunding operations will supersede much that I have written you. I received and answered your telegram of to-day. Arrangements will be made with the new associates for delivery of four per cent. consols and the receipt of called bonds in London.
"Although I have given notice that I will feel at liberty to do so after the 4th of May, I prefer that you will postpone any new arrangement for delivery to other parties until the 10th; hoping that before that time Messrs. J. S. Morgan & Co. will be able to close out the balance of their last subscription."
On the same day I made a call for $160,000,000 10-40 bonds, being all of such bonds outstanding, except an amount that would be covered by the proceeds of ten dollar refunding certificates. The sale of these certificates gave the department a great deal of trouble. The object and purpose of the law was to secure to persons of limited means an opportunity to purchase, at par, certificates of indebtedness bearing four per cent. interest. As they could be converted at pleasure into 10-40 bonds of small denominations, it was thought they would be promptly taken by the persons for whom they were designed. They were sold in limited amounts to individuals at post offices, but as they were, when converted into bonds, worth a premium, bankers and others hired men to stand in line and purchase certificates. This was a practical fraud on the law, and was mainly conducted in the cities, and where done the sale was discontinued. The great body of the certificates were taken by the class of persons for whom they were designed. In a brief period they were sold, and the proceeds were in the treasury.