The morning news. [volume] (Savannah, Ga.) 1887-1900, 1891-01-11
NICARAGUA'S BIG DITCH.
THE BILL TO INcORPORATE THE
CONSTRUCTION COMPANY.

CONSTRUCTION COMPANY.
Senator Sherman Reports It from the
Committee on Foreign Relations
It Provides That the Govsrnmsnt
Shall Gusrantee 500, 100000 Worth
OF the Company's Bonds and Per
Gent. Interest.
WASHINGTON, Jan. 10.--In the Senate to-
day Mr.. Sherman. from the committee on
foreign relations, reported the bill to amend
the act Of February, 1889. Incorporating the
Nicaragua Canal Company, authorizing an
issue OF bonds, guaranteed by the United
States. IL was placed on the calendar and,
with the accompanying reports. was or
dered printed.
The report Of the committee recites thu
importance Of the canal project, treats i'm
detail Of the history Of the past negotia--
tions on the subject and maintains that tho
proceeding OF Great Britain at Belize, on the
hesqutte coast, discharged the United States
from its engagement with Great Britain In
1850, to refrain from exercising control of
part OF Central America.
COST OF THE WORK
The report says that the work Of the prI--
vate corporation on the canal has advanced
WAOh Slcae inquiry tuhI buo bOEul COSL OF
the project win be but one-third more than
the Welland canal, and that it will
be completed within six years.
The full cost of the work Ia
set down at s100, 900, 900. The committee
feels that 10 secure this amount Of money
the company viii be obliged to sell bonds aU
large discount, consequently ii will be
necessary TO impose heavy tolls on shipping,
and as the canal would really constitute a
part of the coast line of the United States
this burden would be largely borne by the
American people.
GOVERNMENT ENDORSEMENT ADVOCATED.
Therefore, the committee believes that 10
would 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 2100, 900, 900, SO
that they may be sold at par, with
actual expenditures of the company; and,
second, the tolls, which would otherwise
| amount to S12, SOC. 900 annually. In its
present form the bill meets the objections
raised by President Cleveland 90 tho treaty
negotiated iu 1884. az it does not commit the
United States 10 defense Of the national in>
tegrity OF the Central American states.
PROVISIONS OF THE BILL.
The bill reported TO the Senate Is entitled
"a bill to amend an act to incorporate ths
Maritime Canal Company OF Nicaragua"
approved Feb. 90. 1889. Its provisions in
substance are as follows: The capital stock
OF the company Is to be limited TO S100;O00,-
000. The existing stock and contracts
| OF the company are to be made to conform to
the requirements of the bill. To secure
means TO construct and complete the canal,
| the company Is authorized to issue bonds in
denominations of not less than 500 nor
more than 1900 to an amount not ex-
H.
Jan. /, 1891, and to be payable
Jan. l. 1911, with interest at the rate Of 3
per cent, payable quarterly. The bonds
are 10 be secured by a first mortgage on
tho property and the rights of the property
Of tho canal company, including all the
concessions and franchises, and the
mortgage is to be 30 framed as TO
be a first lien under the laws of
Nicaragua and Costa Rica. The bonds are
to be printed and deposited in the United
States treasury, and are to be issued by the
Secretary OF the Treasury to the company
only as the work on the canal progresses.
LIABILITY OF THE UNITED STATES.
The bonds are to bear the guarantee OF
the United States for principal and interest
as it aecrues. and the company is to issue
no other bonds The secretary is author
ized to pay the interest on the bonds as 10
becomes due, II not paid by the
company, and an indefnite appropria-
tion for the purpose is embodied
interest as it falls due, and upon the pay
ment thereof by the United States. the
company is required to pay to the United
States the amounts paid by the United
States on the guarantee with ihteress
annually at 4 per cent. until paid. For tha
sums paid by the United States under guar-
ansse, the Uaited States is to
under the mortgage which the bondholders
would have had II the same had remained
unpaid by the company and had not
been paid by the United States. But until
the expiration Of five years after the canal
has gone into operation, and 80 long during
that period as 1t shall remain uader the
control Of the Canal company, this subro-
enforced by foreclosure.
In the financial scheme of the bill IL Is
provided that SIC. .000, 600 Of the shares are
"a be held in the treasury as pledge to the
United States for the repay on demand
of any sum paid under it's guarantee, with
interest on the sums 80 paid az the rate
Of - per cent, and the Secretary Of
United States may at bis discretion vote
such stock in person or by proxy at any
stockholders' meeting, and the United States
shall at any time before the maturity of the
bonds have option at the discretion OF CON-
gress to purchase at par value all or any
part Of the stock SO hyposhecated. The
United States may apply In payment for
such stock the sums paid under the guaran-
tee, and the remainder Of the purchase price
Of the stock shall be applied either for the
redemption OF bonds or for sinking fund.
The original act Of Incorporation
is to be amended SO that six of the fifteen
directors Of the company shall be appointed
by the President by ani with the consent
OF the Senate. These government directors
are not to be stockholders and are to
report direct to the President All
the rights reserved to congress by
the original act (seetiop 81 are reserved.
The report Of the committee on foreign re-
lations accompanying the bin IA adocument
Of twenty printed pages, and, as stated In
its text, 1t represents she views Of the COM