The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1896-03-31
Finance Committee Discuss the
Loan Bills.
CITIZENS OPPOSE PRESENT FORM.
Minister Damon Explains-London
Market Cheapest-Desire 10 Keep
Bonds In Hawaii or United states.

The first meeting OF the Special Fin
ance Committee was held Monday af-
| ternoon in the Senate chamber, TO
consider the loan measure introduced
| by the Minister of Finance. Besides
the members of the committee. there
were present President Dole, Minister
Damon. Senator McCandless, Repre-
sentative Richards, P. c. Jones, w. G.
Irwin. ]. B. Atherton, F. NJ. Swanzy,
L. d. Tenney and A. B. Wood.
Senator Waterhouse was elected as
chairman of the committee. Mr.. Water
house explained that the object of the
meeting was to consider, first. the adj
visibility of the consolidation Of the
public debt Of Hawaii.
As Minister Damon was the author
of the Loan Acts. he was first called
upon. He stated that the question Of
| the consolidation of the public debt had
lbeeen agitated in one way and another
| for a year or mere. A few months ago
\ he had undertaken to draft an act with
this object in view. No action had been
taken upon the matter by the Excel
tive Council. This was the first time
any move of the kind had been taken
in this country. and consequently those
having, the matter in hand were, in a
measure, cropping in the dark: they had
no precedent to follow. He had sought
advice in London. as that was market
where such matters were handled
great deal. and il was the cheapest
market. He had gone to London in
stead of to the United States. because
| the fnanciers there were better &C.
quainted with the situation here. Some
1 had thought best to go to New York or
Boston. but London was undoubtedly
the cheapest market, and naturally he
had sought the place where he thought
the best trade could be made. In max
| ing a loan of this kind the first query
was to know the political condition.
Unfortunately, Hawaii has gained the
reputation of being a revolutionary
country, and he would hesitate before
going to either New York or Paris.
The first offer under the Act would
be made to the people of Hawaii. AT the
kpresent time the Government is paying
two-thirds Of its income for salaries
and pay rolls. and the remainder is
spent for Incidental expenses. So long
as this condition obtains. the country
must go on borrowing money. If it is to
carry on the public works.
Another reason for drawing the Act
was that any business man desires to
have his loans in as compact form
as possible. The time was coming
when, in order to have cable connection
with San Francisco. this Government
would be obliged to be party to the con-
tract, and issue bonds and have
voice in the corporation controlling
the cable. This may come sooner, or
| it may come later, but this country
should place itself in position to meet
the contingency.
As to granting a commission to syn
dicates for floating the loan. the Min
lister referred to the necessity of build
I ing wharves, etc. The parties desiring
these improvements might give valu-
able aid in placing the bonds to cover
the expenses of such improvements.
do not know of vital point in any of
the Acts where the Minister Of Finance
can act without the consent Of the Elk
w-ik tha
consent of the Legislature. The rea-
son for introducing separate Acts was
that II was the custom to print the Act
authorizing the loan in the bond, while
the Legislature could change from time
to time the method Of floating the loan
Minister Damon closed bis remarks by
requesting criticism, and stating that
he would willingly answer any ques-
tions that might be put.
Senator Baldwin asked what amount
it would be necessary to raise under
the Loan Act for the next period.
Minister Damon said the average
amount for the past two years had been
$22, 500 per annum. The reason for not
being satisfied with this was that un-
der the Act of 1893 money could only
be expended Tor the definite objects for
which it had been appropriated. Some
appropriations had run out, while bal
ance left in other appropriations could
not be transferred.
In answer to the question of Senator
Brown as to the general policy of con-
solidating the loans at this time, Min |
lister Damon said 1t was his private |
opinion that the debt should be con-
solidated as soon as possible at lower |
rate Of interest. Six per cent was too |
much to pay.
Mr.. Jones was called upon for an
opinion, and stated that he thought it |
a mistake to attempt to consolidate the |
loans under the conditions named in |
the bill. II was poor policy to allow ~
per cent. discount and is per cent. |
commission. II was a mistake TO put |
these conditions in the bill. By the con- |
ditions Of the bill 81, 400, 900 was allowed |
to cover an expenditure Of q, 500 900. |
With the rate of interest at per cent, |
the loan would cost 4.s. per cent, in adj |
dition to which would be $3.50. 900 to be |
paid By the Government at the maturi-
ty Of the loan.
The margin was altogether too large. |