COMPLETE success attended a negotiation which I conducted about this time for Colonel William Phillips, president of the Allegheny Valley Railway at Pittsburgh. One day the Colonel entered my New York office and told me that he needed money badly, but that he could get no house in America to entertain the idea of purchasing five millions of bonds of his company although they were to be guaranteed by the Pennsylvania Railroad Company. The old gentleman felt sure that he was being driven from pillar to post by the bankers because they had agreed among themselves to purchase the bonds only upon their own terms. He asked ninety cents on the dollar for them, but this the bankers considered preposterously high. Those were the days when Western railway bonds were often sold to the bankers at eighty cents on the dollar.
Colonel Phillips said he had come to see whether I could not suggest some way out of his difficulty. He had pressing need for two hundred and fifty thousand dollars, and this Mr. Thomson, of the Pennsylvania Railroad, could not give him. The Allegheny bonds were seven per cents, but they were payable, not in gold, but in currency, in America. They were therefore wholly unsuited for the foreign market. But I knew that the Pennsylvania Railroad Company had a large amount of Philadelphia and Erie Railroad six per cent gold bonds in its treasury. It would be a most desirable exchange on its part, I thought, to give these bonds