Democratic Sentinel, Volume 3, Number 31, Rensselaer, Jasper County, 12 September 1879 — SHERMAN’S PET BANK. [ARTICLE]

SHERMAN’S PET BANK.

4ml tbe Peculiar Financial Operations in Connection Therewith. [New York Cor. dneinna'i Enquirer.] That the First National Bank of New York is John Sherman’s pet bank, was shown by his recent extension of time oh a check drawn on the bank for $4,000,000 by Acting Secretary Gilfillan, while Sherman was off junketing and speech-making recently. Mr. Gilfillan, who is a business man, wanted $4,000,000 for the use of the Government, and, very naturally, he drew a check on the bank that owed the Government the most money. If Sherman had not gone out of his way to grant the extension, the First National Bank would have had to pay up promptly, just as the other members of the Syndicate did. The reason assigned by Sherman for granting this favor to his pet bank is that, being .the last to subscribe, that bank should be tbe last to pay. As a matter of fact, all the banks subscribed on the same day, within a few hours of one another. In other words, Mr. Sherman permits the First National Bank to profit three-quarters of one per cent, on $40,000,000 because it was about three hours behind other banks in subscribing to the loan. There is no reason for his extending the time for the First National Bank to pay up that would not justly apply to other members of the Syndicate; and the opinion is freely expressed in Wall street that the First National Bank has been made to share its profits with Mr. Sherman’s friends. A big slice of the profits went to defray Republican expenses of the pending canvass in Ohio. It is freely asserted that a member of the Ohio State Republican Committee went to all the Syndicate banks and substantially demanded a share of their profits to help bolster up Hayes. At least one-half of the banks, however, refused to pay a cent. The officials apniied to said promptly; “I’ve got no interest in the Ohio election. I would just as soon see Ewing elected as Foster. I don’t care a fig about either one, and I won’t subscribe a cent.” There is much dissatisfaction among national-bank officers and other holders of call bonds at Sherman’s preference of the First National Bank as a purchaser of 4-per-cent, bonds. After his circular, promising an opportunity to holders of 10-40 s to exchange them advantageously for 4 per cents., his sudden dicker with the Syndicate, and his preference of the First National Bank to the detriment of more than 2,000 other banks is considered as influenced by motives somewhat peculiar. An officer of one of our banks said this evening:

“ Sherman gave all of us cause for complaint when he gave an extra commission to banks that made speculative subscriptions. That was a poor encouragement to banks that were acting prudently. When the First National Bank wanted to realize on these bonds, they got the price down to t per cent, premium, with $ per cent, of earned interest. Since they got the extension from Sherman they put the bonds up to f and i per cent., showing the value to them of being relieved from the payment of their debt to the Government. Instead of permitting the First National Bank to play fast and loose with the Government, Sherman ought to have kept faith with the other banks, and allowed them to come in and get some of the 4 per cents. There would then have been no need of granting an extension to any bank; and when the Government wanted its money it would have got it. As for Mr. Gilfillan, he would not take any part in Sherman’s scheme to favor the First National Bank. I guess he would rather be kicked out of there than not. He is not afraid of Sherman, and evidently did not Understand Sherman’s plan to favor the First National Bank, or he would not have drawn that $1,000,000 check. “ There is no doubt that if Sherman had not stepped in the First National Bank would have been in a tight place. They would have been obliged to offer their bonds, and must have broken down the market. This would have been disastrous. One peculiar feature of it is that if the First National Bank had come to grief by its speculation in 4 per cents, its depositors would have lost everything, because the Government is a preferred creditor. That sort of gambling in banking should be prohibited by law. It is singular that the Government, having charge of our national banks, should permit such enormous operations by small banks like the First National Bank, knowing that if the speculation failed the result would be so disastrous. Sherman has been so partial to the First National Bank in the matter that it is common talk in the street. The attempt to make capital for the Ohio campaign fund out of the Syndicate banks is also well known. Mr. Sherman’s explanation of nis reason for giving an extension to the First National Bank will not bear investigation by those who have watched the course of events. He has, at least, narrated the facts in such a way as to deceive the public.” “Have you any positive reason to know that politics have been brought to bear in the placing of this 4-per-cent, loan by Secretary Sherman?” “Only this: Just before the announcement was made that an extension of time had been granted by Secretary Sherman to subscribing banks to the 4-per-cent, loan, a member of the Ohio Republican State Central Committee called on me, in connection with my bank, for a subscription to the Foster campaign fund in Ohio. I asked why he came to me. He said that Secretary Sherman had directed him to-call on Gen. Hillhouse, and that he would give him a list of banks to call on in this city. Gen. Hillhouse had given him the list of those banks which had subscribed to the 4-per-cent, loan, suggesting at the same time that out of their profit they could certainly afford to contribute.” “Was he successful in soliciting contributions?” “The story is told. You may draw your own inferences.”