The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1896-04-24

IN De0dI OF senator ii. r. BALDWIN
and myself, members of your Special
Committee on Loan Bills Nos. Is, 10, 20
and 81, beg leave to report as follows
Nos. Is and IS. We are of opinion that
authority should be given to the Min
lister of Finance under these Acts to
consolidate or to refund the so-called
London loans about 81 900 ,OOO) when
ever favorable opportunity should Of
fer itself, but at rate of h crest not
exceeding Az per cent, and at a dis
count and commission not exceeding 10
per cent, and we so recommend.
Nos. 20 and 21. We are in favor of
loan not exceeding 100000, and to
give Hawaiian investors the prefer
ence.
1 am authorized to state that Senator
ii. p. Baldwin concurS in this minority
report, but on account of his departure
we had no time to agree on further par
ticulars, and l therefore submit, an
nexed to this report, my individual aF-
guments and suggestions.
Respectfully submitted,
H. w. SCHMIDT.
1T may not be opportune now to con-
solidate the entire public debt, but cir
cumstances may change within year,
and the Government should be ready
to accept favorable terms whenever OBJ
tainable. We have waited many years
for a closer political union with the
United States, and should not defer any
longer any improvement in our financial
affairs on account of such uncertainty.
eff it should be deemed advisable not
to disturb the bonds held here, the con-
solidation or refunding can be confined
TO the bonds held in Londcn, as recon-
mended. The interest to be paid out
abroad would be certainly less than the
present amount. In every case the in
terest and discount should be a great
deal lower than in the bill, and the new
bonds should be for a long term of
years, from thirty to fifty, at the Gov
ernments option to redeem sooner. A
number of years savings in interest
are required to make up for the loss
in discounts and expenses. If the Min
lister should not be able to carry out
the plan of consolidation on these terms
he will at least gather further informa-
ton on the subject, under the authority
of this Act. For said purposes the fol-
lowing amendments are recommended
to Bill No. 10:
Il. Insert in preamble, line 6, behind
the word loans, as are now held in
London up to the amount of one mill |
lion dollars
go Section 1. Cross out in line the |
figures 3,450,OG0' and insert 81 ,000,- |
O0O.'
81 Section 2 Cross out in line the
word six and insert Az
ITO Bill No. 10:
Section 1. Cross out all words behind |
exceed in line 5 and insert in it's place
Eight per cent. on bonds issued under /
he nfh of 10 Coi6
not more than Az per cent. interest
Section 2. Cross out behind the word
two in line the words and half
1T is evident that number of i'm
proVements in public roads and build
ings, wharfs, ETC., are an immediate ne
cessity in order to develop the country |
properly, and that it is impossible to
pay for all this out of the current re-
ceipts.
THE appropriations asked for under
this Loan Act are not to hand as yet,
but they will be in the neighborhood of
one million dollars, and therefore a
limit to this amount, as recommended,
seems sufficient.
1T is desirable that home capital |
should have the preference if the bonds |
are taken at par, or even at per cent. |
discount If sufficient bonds cannot be |
sold on the Islands, then there seems to
be no reason why they should not be |
placed in the market in San Francisco, |
New York and London. 1t is true that |
the interest will have to be sent out of
the country, but against this the capital
has to be invested here first of all, to |
enable the Government to carry out the |
intended improvements, which will pay
in indirect taxes more than their cost
and interest.
Public improvements will benefici- |
ally affect all business enterprises, by
the circulation OF more money, and will
especially benefit the laboring classes |
during the present hard times. The
rate of interest will no doubt be salts
factory to capitalists, but at the same
time the Government should not be
obliged to wait till large dividends and
profits enable our resident capitalists
to make investments in Government
bonds Suppose the dividends should
be small and the parties not disposed
to take up the bonds on Government |
terms, then all improvements under this |
Loan Act will have to be stopped and
progress delayed. In fact the Govern |
ment would be placed in an unpleasant |
position between capital and labor.
ut is also impossible to prohibit the |
sale or transfer of bonds acquired in |
Honolulu to any parties abroad, in the |
United States or Europe, and the only |
difference would be that private parties |
earn the profits which the Government |
aims to secure for itself. |
Therefore, although favoring Ha- |
waiian investors, no terms can be made, |
which will be solely beneficial to these
parties.
There is no reason to feel against |
foreign capital as we have needed it in |
the past and will need it in the future |
to build up and strengthen our old and
young industries. If these foreign loans |
should tend to reduce the regular rate !
Of interest on the Islands, there will be |
M harm done as q low rate of interest |