The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1891-01-11
NICARAGUA CANAL.
A Favorable Report On Govern
ment Aid to the Same.
GUARANTEEING THE BONDS.
How it viii Assist the Company and the
People-C0mmander Refers Reply
to Secretary Tracy.

WASHINGTON, Jan. 10.-The report of the
foreign relation committee on the
Nicaragua canal presented by Sher
man this morning recites thu import
ance of the canal project. 1t treats in de-
tail of the history of past negotiations on
the subject The report says the work of
the private corporation on the canal has
advanced with great rapidity, that the
total cost of the project will BIZ but one
third more than the Welland anal, and
that it will be completed within six years.
The full cost of the work is set down at
S100, 600, COO.
The committee feels that to secure this
amount of money the company will be
obliged to sell It's bonds at large discount,
consequently it viii be necessary to impose
heavy tolls on shipping, and as the canal
would really constitute part of the coast
line of the United States the burden would
be largely borne by the American people.
Therefore the committee believes IL to be
the part of economy, aside from considera-
tons OF national policy, for the United
States to guarantee the bonds of the com
pany to the amount of $l0O000,000 so they
may be sold at par with the result of re
ducing the first actual expenditures of the
company, and second tolls, which would
otherwise amount to Sl2, 10000 annually.
In its present form the bill meets the OBJ
| Jections raised by President Cleveland to
the treaty negotiated in 1884 as it does not
commit the United States to the defense
Of the territorial integrity of the Central
American states.
! In conclusion the report, which is unani-
nous, says: at is believed by your COM
mittee that the United States will not be
called upon to pay any portion of the prin-
cipal or interest of the bonds, but that the
work itself will amply repay all its costs
and yield its benefits not only to the people
OF Nicaraugua and Costa Rica but the CIV
Liked world. If it appears at any time that
| the interests of the United States are in
| Jeopardy from any cause, it can purchase a
majority of the stock and become the con-
trolling owner of the canal by paving it's
own bonds to an equal amount, and the
property, tolls, income and profits of the
canal will be ample security against the OBJ
| legations 1t assumes. The bill reported
| provides that the capital stock OF the
company is to be limited to 100000
and to complete the canal the company
is authorized to issue bonds to the amount
not exceeding the capital stock, dated
January l, 1891, and payable January 1911,
with interest at 3 per cent. payable quar-
terly. The bonds are to be secured by a
| first mortgage on all the property Of the
company. The bonds are to be deposited
in the United States treasury and issued
| TO the company only as work on the canal
progresses. TIE bonds are TO be the guar
antee of the United States of the principal
and interest ass it accrues and the-company
is to issue no fother bonds. The secretary
is authorized to pay the interest on the
bonds as it becomes due, if not paid by the
company, and an indefinite appropriation
for this purpose is embodied in the bill If
| the company fails to pay the interest as it
falls due upon the payment thereof by the
United States the company is required 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
"1-The amount of sock, which is. the
amount of the bonds at par value to be
| issued by the canal company. For eXpen-
ditures prior to January |, 1891, it shall
make an aggregate of 81, COO, 900, which may
be retained by the stockholders and be
non asseSsable.
"2-The amount of shares stipulated to
be delivered to Nicaragua and to Costa
Rica according to their CONCESSIONS
''3-Seventy million dollars of the shares
is to be held in the treasury as pledge TO
the United States for the payment on
demand OF any sum paid under its guaran-
tee, with interest on same sums so paid at
the rate OF per cent, and the secretary of
the treasury on behalf of the United States
may at his discretion vote such stock in
person or by proxy at any stockholders
meeting, and the United States shall at
any time before maturity of the bonds have
an option, at the discretion of Congress,
to purchase at par value all or any
part of the stock so hypothetical
as may apply in payment for such stock all
sums paid under the guarantee and the re-
mainder of the purchase price of the stock
shall be applied either for the redemption
of bonds or for sinking fund.
The residue of its stock shall be issued
by the canal company only after it shall
have been subscribed for, and it shall only
be offered for subscription when, in the
opinion of the President of the United
States the proceeds of the installments of
bonds shall be insufficient to meet the cur
rent requirements of the company
The original act of Incorporation is to be
amended so that six of the fifteen directors
of the company shall be appoin ted by the
President, by and with the advice and con-
sent of the Senate. These government di-
rectors are not to be stockholders, and are
to report direct to the President