New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1891-01-11
AIDEOR THE NICARAGUA CANAL
THE SENATE FOREIGN AFFAIRS COMMITTEE
FAVOR \ GOVERNMENT GUARANTEE.
THE COST or THE WORK ESTIMATED AT
500 600. OOo-ADvANTAGI+s OF THE PLAN
TIE COMMITTEES REPORT.
fBY TELEGRAPH TO TIE TKIBUNL.l

the Arthur Administration with Nicaragua concerning
the Nicaraguan Canal project was the introduction To-
day by Mr. sherman, from the committee on Foreign
Relations Of q bill amending radically the aci under
which the present canal company is operating. MIR.
sherman proposes. as announced in these dis
matches a, Tuesday. lend the credit Of the Govern
mont 10 the canal scheme by guaranteeing the pay
mcnt Of both principal and interest of new issue OF
bonds TO take the place of all outstanding obligations OF
the company. BY this means, IT Is hoped the canal
will ba mt beyond the chance Of financial distress. and
IFS completion will be assured promptly ana econom-
ically The great saving IN cost IL be ehecicd ny me
aid given by the Governments guarantee in floating
tbe companys securities will have, II is argued an
important effect in reducing the tolls TO be charged
when the canal /, opened and will thus be OF general
National benefit.
Tho necessity Of having short route to the Pacific
~ soon As possible WAS. however. the chief induce
ment TO the Foreign Affairs Committee to pledge the
Governments credit to the undertaking. ana the com
mercal and military advantages offered DIV the canal
were regarded fully warranting the poS'iD" as
sumption Of part Of the Nlcaraguan companys debt
The bill wa, reported by a unanimous vote III thc
committee and the reasons for this action are clearly
and fully set forth in the report which accompanies
the measure. ,,s
The bill reported to-day BY Mr.. sherman Is emitted
a bill To amend act TO incorporate INC Narl'''no
Canal Company Of Nicaragua approved fcoIua'! ~
1850 Its provisions in substance. are a. iolo"s
The captal stock Of the company Is 70 Dc HnhNt 70
ZOO ooo Coz Tho exist,ur stock and contracts OF the
o,n,nv are 70 be made conform to the requirements oil
the hill To secure the means n construct anu 'oHc'c
the canal the company Is authorized 70 issue oonu, III
denominations OF no. Jess 300 more than 7loOo
n AN amount not exceeding OOOOooOo 70 De uaIu jan
-. isot and to be ;ayablc January !, 1891, WIN
ntcrc. At the rate OF per cent, payable qn'rrF me
rond, are To be- secured by first mortgage Oh inc property
I rh, n, nropertv u Tie csnal company including all
a,d tho nor raQ 4, h. 10
framed A. h. be first lien under the laws oi N!'daeua
and Costa Rica The bouds are 70 bo printed ana de'
noted In the United states Treasury ana are 10 o. 'ueu
tv the Secretary the Treasury 70 the company only AZ
,h work On the canal proceeds Tie bonds are 70 bear
tho guarantee of the United States for principal aud IN
,orh A. IL accrues and tho company Is To issue no other
bonds, The Secretary l. authorized N pay inc interest
on the bonds becomes due, II not pad 10y inc CON-
pan and an indefinite appropriation for the purpose /
embodied in the bill.
u tho COMPANY fails to pay the interest 1t falls due
and upon the payment thereof by the Tinted states the
company +, required to paw u the uhitHd S'aH' inc
amounts p,d bv the United States the guarantee. with
interest annually per cent, until paid FOR sums
paid by the United under the guaane" The nlrl
states is n he subrogated the ght7 undr The H"fiS
which the bondholdcrs would have had 4 the same hel
remained unpaid by the company ana haH NOT b''h p''
bv the United States. But gnul tho expiration Z" rye
vear ar the canal has gone into operation. and 30 long
during that period &; shall remain under The cou' Of
the canal company this subrorated lion Of the United
states 4, not to b. enforced by foreclosure.
A. soon a. practicable after surrender and cancel
aton Of the stock and the cancellation and mobilization
n outstandng contracts and agreements OF the company
for the construction Of the canal the Secretary oil INC
Treasury is 70 deliver the company guaranteed oond'
10 An amount equal the expended by the sah com
uanv and the Nicaragua Canal Association PRIOR ~
January ls?l In possessions, promoting enter
prise constructing the canal, together with interest on
such amounts tho date Of payment not exceeding the
total amount of - 100000 Ne IS also n deliver 70 me
Guf Al
money actually paid out and expended 10y The company
In the construction Of the canal from and infudnS January
l. 1891, u the anal adjustment OF the
account with interest thereon a. pc.
cent These. accounts - be rendered
to the satisfaction Secretaries Of stat" and Of the
Treasury and are be received and applied by tho COM
pany and stockholders IN full payment q all Np"nd 1re
made TO be made, and all Incurred lanii
ties
The Prosden, il 10 have made careful detailed esti.
mate Of the the canal according u the company
plans including cost Of administration ana lnNTs' on
bond, 1897 and a. interval, Of sixty DAYS similar est!
mates ar be made upon which the company is to r.
ce,c bond, 10 the Of such cost and interest to be-
come due Nfo. the next estimate. tho total amount not
to exceed the Of the canal. Tho proceeds ~ the
bond, are % ~ applied the expense and construction
Of the canal and interest tho bonds, ana ar U De-
sold at not less than Isr.
10 secure to Nicaragua and Costa lca the benefits Sup
ulsted by and % save the United sate-
the OF the company Is limited % slOooOoVO IL j.
% be issued follows.
rir.tAn amount Of the stock which. with tho amour,
Of he bond, az their par 20 be issued by the Canal
con p,ny cNp-nditurcs por 20 January ls3l shall
make an agQreEa Of 1000 COO be retained by tho
stockholders and shall De non-assessahl".
Secondy-Ih Of shares stipulated n be delivered
=. Nsrags and Costa I,a according % their
1hirdy-s7O 600 900 Of shares arr to be held IN the
pledge 10 the United state, f'r the ra> ori
any sum paid under ~ guarantee WIN IN
tcrs, on NJ -un, paid ~ lo rl" ~ banN per cent
r,fff Ir.4 D. Cd
state, nay a. his secretion vote such o in person, or
by proxv any stockholders meeting and the Init"d
States shall time before the maturity Of the bonds
have the option At the discretion Of Congress purchase
a. par part Of the stock hyIothecs''h
inc United states NAY appy payment for such the
sum, paid under guarantee and the remainder Of the
purchase price stock shall BE- applied either for tho
redemption Of the bonds or Tor sinking fund.
Fourthly-The residue of tho stock shall he issued by
tn. canal company afr shall hav" been subscribed
for and IL hall only b. offered ior subs 'rquon wh
the opinion Of President u the United states tho
proceeds o. u-Almcnts u tho mortgage bonts ha Doe
insufficient 10 meet tie current requirements q the
panv Tho original act Of incorporation T. N BE- amended
-, that six 81 fifteen directors 81 a." company shall b."
appointed the President by and With the advice aud con
sent Of tn Snate These Government directors are not
to be stockholders and n report directly n tho
President All the rights reserved to Congress bv the
original a- fScctio, s. are reserved
The repOrr>Sf the Committee on Foreign Relations
ACCOMPANYING tn bill Is document Of twenty printed
pages, and as stated in the text, IT represents the
views II the committee without "A division. II begins
with a recital Of the senate resolution directing tho
committee TO inquire into the canal enterprise. and
SAY that in obedience 10 the direction the committee
diligently and extensively pursued an investigation
and IL, a result reported the accompanying bill Then
follows historical sketch Of the exploration for
connecting link between the Atlantic and Pacific
oceans. beginning with Coumbuss examination In
15O4 The report SAYS that time research and expert
mcnt have now demonstrated thai the only adequate,
efficient and practicable passage j. that by way Of Lake
Nicaragua. Reference il made 10 itc proposition
made by Nicaragua IN loo for Joint owncr'h hip OF
canal to be constructed by the United states and Me
arspua and 4, the Interest shown in the matter by
the United states Government
The report says that when the northern portion Of
Mciico wa, annexed 10 the United states, In 1850.
and the cnOrino, natural wealth Of the country
discovered the construction Of canal appeared 10
be an immediate and somewhat urgent necessity. Tho
sI.,Id Ia