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

MR.. EDITOR-The question Of the
consolidation of the public debt brought
to public notice through the introduc-
ton of a bill into the Senate by Finance
Minister Damon is certainly a matter OF
great importance TO every loyal citizen
and well wisher OF he Republic of Ha-
wall
Mr.. Damon's cordial invitation TO the
people TO criticise his financial plan for
consolidating the debt and reducing the
rate of interest has not been accepted,
wholly. as a complimentary phrase.
AS a taxpayer of many years resi-
dence in this country, am as much OPP
posed 10 any movement or manipula-
ton of the public finances that will
unfavorably affect it's credit, either at
home or abroad, as any other citizen
Such being the case, I regret very much
that MIR. Damon did not, prior TO the
introduction of the bill, call together the
gentlemen who attended 1.-The first
meeting of the Special Finance Com
mittee," as reported in your issue OF
March 31st, and discuss his plan, Civ
ing them the information gathered
from correspondence and careful study
during period of a year or more. If
the same objections had then been OF
fered. possibly a syndicate might have
been formed which would have guar
anteed the Minister of Finance, under
sufficient bonds, to place the loan in
the United States of America upon such
terms as they could recommend to the
Legislature.
With all due respect to the opinions
of a! Who look upon the United States
as a market for Hawaiian bonds, or any
other good Hawaiian securities, II Is
not. in my opinion, favorable market
Financiers in the East" and in the
West say: Hawaiian bonds may be
better than half the securities we han
die but they are not known IN this
country and are therefore not saleabIe.
Then, too, the most of our trust com
Danies. life insurance companies and
other money lending concerns handling
vast amounts of money are prohibited
by law or otherwise from making in
vestments beyond certain limits within
the United States"
ceivod a letter from prominent gentle
man in this city requesting me TO ascer-
tain at what rate below per cent.
Hawaiian bonds could be placed in New
York or Boston. Through prominent,
well known citizens in both cities, who
applied to leading financial firms,
learned that no encouragement could
be given for reasons already named.
I cabled to London to the Guarantee
Company who were arranging to place
81 600 900 of bonds for the Oahu Rail
way and Land Company, and received a
reply to the effect that they would I'M
derIake TO buy up the old bonds and
place the new loan at Az per cent, par,
on a net commission of 212 per cent,
wit their annual insurance fee for
guarantee of payment of the bonds at
15of l per cent. per annum. The next
imDortant news that reached me from
Honolulu was the revolution of Janu-
airy 18th. 1898.
1t is true. as stated by Messrs. Jones
and Irwin, the bonds of this country are
good The fact that interest has been
promptly met in London during the
ten years our bonds have been held
there has established a credit for us
which ought to enable this country to
refund the debt at a saving of ~
per cent in interest and at a reasonable
expense: but financiers do not work for
mere amusement in London, any more
than they do in Honolulu or elsewhere.
a government is a corporation; every
one of its citizens is a stakeholder. /
doubt if I per cent. of the population are
holders of Government bonds Shall 80
per cent. OF the population continue TO
pay an extra H. per cent. on the bonds
to the other l per cent of the popula-
ton, because they (the bOndhOlders)
want a good investment? One-half or
perhaps more of the per cent. bonds
are held abroad. Why should we con
tinue to pay such holders 6 per cent.
when it is certain we can save over
per cent? Because We shall injure our
credit if we reduce our interest? Be
cause we shall injure the annexation
cause?
The United States and all of its large
corporations have placed their bonds in
London. Will they condemn in us what
they do themselves? If so, we had bet
ter repent of the sin already committed,
issue at once 81, 00O. 900 of bonds in the
Hawaiian or American markets and
call in the London issue.
1t is said, Wait until we get an
nexation, that better terms for the
loan may be obtained In the event
of the failure of annexation, viii any
number of our financieTs who now favor
waiting guarantee to this country that
they will place a loan TO refund the
present debt and supply the additional
capital required TO push this country
forward on as favorable terms as can
now be obtained
Home Investment
1t has been urged that home capital
take up the loan. By all means, give
home capital the first chance at the
loan, on the same terms that can be
made elsewhere. l do not admit the
soundness Of the argument used in ia