In an effort to shore up the U.S. gold reserves, J.P. Morgan & Co. formed a syndicate in 1895 to sell $65 million in gold bonds for the U.S. Treasury.

On February 20, 1895, J.P. Morgan & Co. led a bond offering that helped rescue the United States from a severe two-year economic depression.

The crisis stemmed from the post-war railroad boom that triggered a series of bank failures and a run on gold. By 1895, the country's gold reserves had dwindled.

J. Pierpont Morgan promised to form an international syndicate to buy gold and protect the Treasury from further withdrawals. As he saw it, his efforts to stem the drain, avert default and restore confidence in the dollar would protect the billions invested in the U.S. and restore the channels for foreign capital. But in early February, President Grover Cleveland decided instead to compel Congress to authorize gold bonds for sale.

As the situation worsened, Morgan told the president he had located a still-valid 1862 law, passed during the Civil War, that authorized the Secretary of the Treasury to issue bonds to buy gold coins without having to get congressional approval.

The president asked if Morgan could guarantee that the gold being purchased would not simply join the flow out of the country. The financier signed the contract, knowing that with his connections he could keep that guarantee.

Twelve days later, J.P. Morgan & Co. led a syndicate of bankers to sell U.S. bonds to buy back gold from foreign investors. The firm offered the bonds for sale at $112.25 and sold out the entire issue in New York within 22 minutes.

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