The record-union., 1891-01-11
The Nicaragua Canal Bill Reported
to the Senate.
EFFECTS OF THE SHIPPING BILL ON
THE AMERICAN TRADE.
Commander Reiter of the Ranger Asks
That a Naval Court-martial Investi-
gate His Actions in the Barrundia
Affair-San Diego Quarantine Sta
tion-Crop Prospects for the Com
ing Season.
Special to the REcoRD-UNIoN.

WASHINGTON, Jan. 10.-The report of
the Committee on Foreign Relations on
the Nicaragua Canal bill, presented by
Sherman this morning, recites the i'm
portance Of the canal project ard treats in
detail the history of past negotiations on
the subject. The report says that the
work of the private corporation on the
canal has advanced with great rapidity;
that the total cost of the project will be
but one-third more than that of the We'll
land Canal, and that it will be completed
within six years. The full cost of the
work is set down at $l00,000,000. The
committee feels that to secure this amount
OF money the company viii be obliged TO
sell bonds at a large discount, conse-
quently it will be necessary to impose
heavy tolls on shipping, and as the canal
would really constitute part of the coast
line of the United States, therefore the
committee believes it to be the part of
economy, aside from considerations of
national policy, for the United States to
guarantee the bonds of the company to
the amount of Sl00,000,000, so that they
may be sold at par, with the result of re-
ducing first, the actual expenditures OF
the company, and, second, the tolls which
would otherwise amount to Sl2, SOC, eco
annually. In its present form the bill
meets the objections raised by President
Cleveland to the treaty negotiated in
1854, as it does not commit the United
States to the defense Of the territorial in
tegrity of the Central American States.
In conclusion the report, which is
unanimous, says: It is believed by your
committee that the United States will not
be called on to pay any portion of the
.,J
that the work itself will amply repay all
costs, and yield its benefits, not only to
the people OF Nicaragua, but the civilized
world. If 1t appears at any time that the
interests of the United States are in
jeopardy from any cause, it can purchase
the majority OF stock and become the
controlling owner of the canal by paying
Its own bonds to an equal amount, and
the property, tolls, income and profits OF
the canal will be ample security against
the obligations it assumes.
The bill reported provides a capital
stock company to be limited to 500. .0O0,-
600, and to complete the canal the COM
pany is authorized to issue bonds TO an
amount not exceeding the capital stock,
dated January ], 1891, and payable Janu-
ary l, 1911, with interest at 3 per cent,
payable quarterly. The bonds are to be
secured on first mortgage on all property
of the company. The bonds are to be de-
posted in the United States Treasury,
and issued only as work on the canal pro-
crosses. The bonds are to bear guaran-
tee of the United States for the principal
and interest as it accrues, and the COM
pany is to issue no other bonds. The
Secretary is authorized to pay the inter
est on the bonds as it becomes due, if not
paid by the company, and an indefinite
appropriation for the purposeis embodied
in the bill.
Ifthe company fails to pay the interest
as it falls due, and on payment thereof by
the United States the company is re-
questod to repay to the United States the
amount paid, with interest annually at 4
per cent. until paid.
Stock is to be issued as follows:
EirSt-The amount of stock which, with
the amount of bonds at par value to be is
sued by the canal company for eXpendi-
lures prior to January l. 1891. shall aggre-
gate the sum of 81 100000, may be retained
by the stock holders and be non-assessa-
BILE.
Second-The amount of shares stipu-
lated to be delivered to Nicaragua and
Costa Rica according to their CONCESSIONS
Third-Seventy million dollars of the
shares are to be held in the treasury as a
pledge to the United States for the re-
payment ON demand of any sum paid
under its guarantee, with interest on the
sums so paid, and the Secretary of the
Treasury, on behalf of the United States,
may, at his discretion, vote such stock in
person or by proxy in any stockholders
meeting, and the United States shall at
any time before the maturity of the bonds
have the option, at the discretion OF Con-
gress, TO purchase at par value all or any
part of the stock so hypothecated. The
United States may apply in payment for
such stock the sums paid under the
guarantee, and the remainder of the pur-
chase price of the stock shall be applied
either for the redemption of the bonds or
for the sinking fund.
Fourth-The residue of the stock shall
be issued by the canal company only
after it shall have been subscribed for,
and it shall only be offered for subscrip-
ton when, in the opinion OF the Presi-
dent of the United States, the proceeds of
the installments of the mortgage bonds
shall be insufficient to meet the current
requirements Of the company.
The original Act OF incorporation is to
be amended SO that six of the fifteen Di-
rectors of the company shall be ap-
pointed by the President by and with the
advice and consent of the Senate. These
Government Directors are. not to be
stockholders, and are to report direct to