The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1886-12-28

sources OF national revenue. The Loan
Act shows that there is not the slightest
for this, and no pledge could
be given outside OF the enactment
We say in repIy-and the writer Of the
article well knows it to be the case-that
before the London syndicate would touch
the loan, a preliminary bond, signed by
the Hon. Paul T. kanoa, Minister Of
Finance, on behalf Of tile Hawaiian
Government, was deposited with the
Bank Of England, binding his successors
in office, in the sum Of S2,OOO,00O in
gold coin Of the United States, for the
repayment Of the principal and interest
Of the loan, for the purpose OF securing
all owners and holders Of coupon bonds
to be lawfully issued in accordance with
the Loan Act, such bond to remain on
deposit at the Bank until the
loan in question or 50 much OF
it as may be issued, has been repaid.
This bond makes the loan in question
a specific charge upon "the consolidated
revenue Of the Kingdom OF the Hawa-
iian Islands" a new phrase by the way,
first introduced in Mr.. AhOlo's amend
ments OH behalf Of the Syndicate"
under which this transaction was sue
cessfully engineered. The inference is
that the preliminary bond would have
been valueless, as it contained this
phrase, if the law had not been changed
to conform to it. BE that as it may,
preliminary bond pledging the CONSOLE
dated revenue of the Kingdom to the
effect that the said coupon bonds when
lawfully issued, and the interest coupons
pertaining to such bonds shall be paid in
the manner, and at the time and place
in the Loan Act provided, and that upon
such payment as aforesaid this obliga-
ton is to be void, otherwise to remain in
full force.
VIII the" Herald deny that 4 prelmin-
airy bond to this effect was executed under
seal by the Minister OF Finance and de-
posted at the Bank OF England ''for the
purpose Of securing all owners and
holders of coupon bonds issued under
insisted upon this special security before
it would touch the loan; and will it
deny that it is outside and beyond the
law, and constitutes a first mortgage
upon all the resources of the Kingdom,
of whatsoever kind, upon which the
British Government may realize at any
time at the request of the bond holders,
through the depository, the Bank of
England, should default at any time be
made.
Under these circumstances why should
the men who inspire the ''Herald" at
tempt to mislead the public, and say
that no pledges which could be con-
strued into a mortgage upon specific
sources of national revenue have been
made. We say that every source of ma
tiOnal revenue was mOrtgaged outside
the Loan Act before the loan was
touched by the syndicate. We say fur
thermore, that by reason of this extra
legal action of the Minister of FL
nance, with or without the sane
ton of Cabinet Council, a
preference debt has been created, to the
serious injury and possible loss of the hold
ers of bonds of previous loans who may not
choose to surrender their securities to
put bonus of seven per cent into the
hands of London syndicate. And we
say also, that no national loan transac-
ton of recent times will less stand the
test OF investigation than this one.
The Herald" also says on behalf OF
the benefciaries of the "loan deal'' that
Payment of the interest only, according
to the Act, shall be a charge upon the
consolidated revenues of the country
Nothing less could have been promised
In any loan measured" True, indeed
I'VE wonder what local capitalist would
loan money upon a simple promise tC
pay interest without security for the re
payment OF the principal? We know Of
hone; yet the Herald gravely as
Bures the public that English investors
paid premium of seven per cent to buy
Hawaiian bonds carrying six per cent in,
derest for ten to thirty years, at the
option of the Government, without any
guarantee for repayment of the princi
pal. This truly is a characteristic
4troke of finance for which the Finan-
DIAL Agent OF the Hawaiian Government
! deserves the greatest credit, but unfor.
/ tunately it is in the "Macawber'' line
| and there is nothing in it, The Loan
Act guarantees repayment of the princi-
pal, after clumsy fashion, no doubt
but the preliminary bond deposited with
the Bank OF England makes the security
certain, and from the dignity of the de-
pository it may be regarded as an inter
national pledge, to follow the fortunes Of
all such pledges.
Death of SIR. e. F.. Henson
Yesterday morning, about II O'Clock,