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About The commoner. (Lincoln, Neb.) 1901-1923 | View Entire Issue (Nov. 18, 1910)
ftvmit'wrwv sw'?mv?tyiiy5rvt! NOVEMBER 18, 1910 The Commoner. Harrimaris Panama Canal Profits Tho Now York World, which by the way, is very hostile to Theodore Roosevelt, prints tho following showing about tho profits in Panama securities reaped by the late E. H. Harriman. Tho World article follows: Edward H. Harriman's $50,000 contribution to the $250,000 campaign fund that ho raised in October, 1904, at the solicitation of Presi dent Roosevelt, and by which 50,000 votes wero changed in tho city of Now York alone," rep resented part of the financier's profits on a single sure-thing speculation in Panama canal bonds. Mr. Harriman's claims on this ono deal had been admitted for 10,595,065.07 francs; tho $40,000,000 purchase price of tho canal had been paid by the United States to the "French owners" in May and June, 1904, and Mr. Har riman was able to calculate to a' nicety just what his profits would be. Tho books of the banking firm of Kuhn, Loeb & Co. reveal the fact that Mr. Harriman tipped off by someone who know had bought tho bonds for $160,613.09, and stood to receive more than $250,000 in the final distribution. As a matter of fact Mr. Harriman received $253,060.47, which left him a profit of $86,447.38. Knew When to Buy His first investments were made, when theso securities were at their lowest ebb,' in January, 1902, e.fter tho house Of representatives had passed the Hepburn bill for the construction of the Nicaragua canal with only two dissenting votes, refusing to consider tho Panama Canal company's offer to sell for $40,000,000. But President Roosevelt, whoso relations with Mr. Harriman were then most cordial, had al ready determined on the Panama route. Ho ' summoned the majority of the members of the Isthmian canal commission individually to the White House and insisted that they reverse their previous findings and make a supplementary re port in favor of Panama. The commission reassembled on January 16, 1902, and its final report recommending tho Panama route at the $40,000,000 price offered by the Panama Canal company was adopted. The motion to adopt this report was made by George S. Morrison, who was on intimate terms with William Nelson Cromwell, Mr. Harriman's legal adviser, the Mr. Cromwell who in speaking of Mr. Harriman had told' the Wells-Fargo shareholders, "He can not be replaced, for ho moves in a higher world which wo carv not hope to enter." On January 27, 1902, Mr. Cromwell, whoso services as general counsel had been dispensed with by the new Panama Canal company, was reinstated as American attorney through the Intervention of Senator Mark Hanna and others, and the next day Senator Spooner introduced the bill which Mr. Cromwell claims to have inspired, authorizing the president to buy out the Panama Canal company. Bonds Were Down to 42 Between the adoption of the Nicaragua route by tho house on January 9 and the introduction of the Spooner bill in the senate on January 2d, Panama "sixes" bonds of the old Panama' Canal company of a face valuo of 500 francs, bearing 6 per cent interest sold on tho Paris bourse as low as 42 francs. Mr. Harriman had bought at the right time! Again Mr. Harriman bought Panama bonds in January, 1903. As far as the company was concerned tho deal had then been completed by a hard and fast promise to sell to the United States gov ernment for $40,000,000. This option expired March 4, 1903, and President Roosevelt was flourishing tho big stick to force the Colombian minister in Washington to sign a' treaty giving the United States sovereign power over tho canal zone, which was contrary to the Colombian con stitution. Threat Sent "Sixes" Down Tho Hay-Herran treaty was finally signed on January 23, 1903, though not until Secretary Hay had threatened the Colombian minister,. Senor Herran, on January 16, to break off diplo matic relations if the Colombian government persisted in its attitude. Panama "sixes" which had risen as high as 80 droped to 68.50 in January, 1903, but imme diately after the treaty had been signed they rose again to 82.50. Again Mr. Harriman had bought at tho right moment. Mr. HaTriman bought moro Panama bonds in April, 1903. Although tho Hay-Herran treaty had then neon signed, Colombia was'not willing to ratify it unless tho Panama Canal company paid an Indemnity to offset tho loss to Colombia of hot reversionary interest in tho Panama Railroad company which tho transfer of tho concession to thb United States entailed. Tho canal company refused to negotiato with Colombia, but Mr. Cromwell "had numerous conferences with Secretary Hay, Senator Hanna, and on certain occasions with tho president," and induced tho government of tho United States to accept his client's view that "Colombia had already pledged herself to consent and that her consent ought to bo imposed on her as being exacted by international good faith." Somo Diplomatic History Mr. Harriman bought Panama bonds, and Mr. Cromwell collaborated with Secretary of Stato Hay in tho preparation of Instructions to Mr. Beaupre, tho United States minister at Bogota, saying that tho proposed action of Colombia "would bo inconsistent with tho agreements al ready mado between this government and tho canal company, with tho act of Juno 28, 1902, and with tho express terms of the treaty Itself." Mr. Cromwell even sent a copy of theso instruc tions a highly confidential diplomatic docu ment to tho new Panama Canal company in Paris which conveyed its appreciation by cablo in the following terms: "We have received Mr. Hay's letter of instruction to tho United States minister at Bogota, which satisfies us, and for this wo thank you." In April, 1903, Panama "sixes" which had been firm at 87 fell to 81. President Roosevelt had United States army officers on tho Isthmus Beeing that tho work on tho canal was dono in accordance with tho plans and purposes of his policy. Tho "culmination of tho deal" ap peared assured. Apparently Mr. Harriman had again bought at tho right time. But Colombia, willing to walvo pecuniary ad vantages, willing even to forego tho indemnity which in all justice and equity sho had a right to exact from tho French company, wanted to amend tho treaty so as to avoid a direct viola tion of the Colombian constitution. President Roosevelt, who was never a re specter of constitutions, would have no amend ment. He had an interview with Mr. Cromwell, and as a result Secretary Hay sent an ultimatum on June 9, 1903, to the Colombian government threatening reprisals if tho treaty were rejected or its ratification unduly delayed. Prepared for tho Emergency Mr. Cromwell who had proposed this step .knew that it could have but ono result, tho re jection of the treaty. But ho was prepared for this emergency. Preparations had already been mado for the Panama revolution both in Wash ington and New York. When the treaty was finally rejected by an unanimous vote of the Colombian senate on August 12, 1903, Panama "sixes" fell to 62.50 and then dropped as low as 54. They reached their lowest point on October 15, tho day on which President Roosevelt gavo orders to the navy department to hold war vessels within striking distance of the Isthmus, and Mr. Crom well left for Paris to obtain the official sanction of the board of directors of tho new Panama' Canal company to tho understanding at which he had arrived with President Roosevelt. On November 4, the day after the revolution, Panama' "sixes" jumped to' 114 on the Paris bourse. Just double the price at which they stood when Mr. Harriman made his first purchase. When Roosevelt Sent for Harriman From then on the- bonds of tho old Panama Canal company and tho shares of tho new Pana ma Canal company rose steadily, and in October, 1904, "when it "looked certain that tho state ticket would go democratic and was doubtful a"s to Roosevelt himself;" when President Roose velt sent for Mr. Harriman and begged him to raise the necessary funds; and when Mr. Harri man saved tho day by collecting $260,000, of which $50,000 was his personal donation, Pan ama "sixes" had gone up to 93.50 and Mr. Har riman lcnow that ho was only lotting go part only of his profits on thin particular deal In Ponama bonds. Mr. Harriman wan not tho only American citizen who profited by Insldo Information on tho Panama Canal deal. . Even In this instanco Mr. Ilnrrlnmn wan tho only ono of thoso operating through Kuhn, Loob & Co. Among tho othors who wero lot in on t)u: ground lloor with him woro S. Loab, J.icob II. Sehlff, Albert Halm, I. N. Sollgmnn, M. M. War burg and Otto II. Kahn. Mr. CroimvtiM'H Sweeping Denial Proaldont Roosevelt transmitted to congrmm with IiIb moiinago of Docombor, 1908, and as part of that massago, a statement from Mr, Cromwell, who had Just assorted: "Neither I nor any of my law firm nor nny ono connoctod with mo over owned, directly or In directly, nny share of stock In tho now Panama Canal company, nor any of tho obligations or securities of tho old Panama Canal company, nor over bought or sold any of tho sharos or securi ties of cither of tho said companloa, nor woro directly or Indirectly 'Interested in them. I am nlso positivo that not a man in public Ufo in America, in or out of congress, ever had tho least pecuniary Interest in tho Panama canal. I do not know, and never nave known, of any American citizen who has ever dealt In any of tho shares of tho now Panama Canal company or tho shares or bonds of tho old company." This statoment by Mr, Cromwell was origin ally published In tho World October 3, 1908, when Mr. Cromwell, to quoto his own words, mado his denial "tho most swooping statement that language can convoy." And the president said In his mossago to congress of December 15, 1908, and as part of that message, President Roosevelt also trans mitted a letter that ho wrote to William Dud ley Foulko on December 1, 1908, In which ho says: "Tho United States did not pay a cent of tho $40,000,000 to any American citizen. It is an abominablo falsehood, it is a slander." that HAiriMoms conference Tho following telegraphic correspondence ox plains itself: "Baltimore, Md., November 13, 1910. "Hon. William Jennings Bryan, Lincoln, Nob. Tho Sun suggests a national conferenco of demo cratic leaders, to be hold in Baltimore within the next six weeks, to outline tho proper policy of the party. The leaders to consist not only of prominent democratic mombers of congress, but also other prominent democrats throughout tho country. Please wire us one hundred words of your views. THE SUN." Lincoln, Neb., November 13, 1910. Tho Sun, Baltimore, Md. I doubt tho practicability of the suggestion. Everything would depend upon tho personnel of the unofficial members of tho conferenco and that would depend upon tho person or committee making tho selection. I think it better to trust the democratic senators and members of congress. They aro selected by tho people and must bear tho responsibility. Individuals desiring to adviso can do so with out a conference, and the sonators and congress men aro always at liberty to consult whom thoy please. W. J. BRYAN. CIRCUMSTANCES SOMETIMES CONTROL Circumstances play an Important part in poli tics, at least in determining the fate of Indi viduals. The congressional elections of 1890, 1894 and 1910 Illustrate this. In each of theso campaigns the result surprised oven tho victors and in each campaign men were elected to con gress who, at the time of their nomination, were supposed to have no chance. Tho efforts of the individual count for much, but a general movement often buries (temporarily, of course) men who have earned re-election, and some times re-elects men who ought to be burled. But potent as circumstances are their Influence is temporary they can not be relied upon to permanently suspend the law of merit. So with parties. One party may profit for a time because of the mistakes of tho other, but in the long run the party must stand or fall according to its deserts. The democratic vic tory won this year Is partly duo to the fight which the party has been making for reforms, partly to tho fact that the republican party proved false to the promises made during tho last presidential campaign. Now that the dem ocrats control congress they must make a record satisfactory or suffer defeat in 1912.