The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1896-04-21

Lorrin a. Thurston's letter on the
funding loan, published in the Monday
issue of the Advertiser, has caused con-
siderable thought among the business
men and financiers throughout the city,
and while it is believed that the Senate
committee will report adversely on the
subject, no one was found yesterday
who directly opposed the bill.
With a capitalist there would be an
aversion, naturally, because he gets his
wealth by collecting interest from his
customers, and incomes would be ma
teriaIly affected by any measure tend
ing toward a lower rate of interest.
One business man who frequently
makes loans in order that he may carry
on his business objected TO having his
name used because persons from whom
he borrowed might call in their loans
to him if it was known he openly ad-
vocated the funding bill, said:
The man who is considered fnan-
cialIy weak pays a higher rate OF inter
est than the one whose standing is Al.
This is so the world over, and no one
realizes the fact more than the mon
led men in the United States. If his
condition is such that he needs money
badly he is willing TO pay a higher rate
of interest. If his condition changes
and his securities are better he will ne
gotiate at lower rate. Practically that
is the position of the Government.
While it wants money as badly, per-
haps, as ever, its condition is better
and it should pay less interest than for
merly. Government loans are made in
the United States as low as 21a per
cent; commercial loans on call are easy
at 4 per cent.
If the Government loan was 4 or 6
per cent, commercial loans would be
materially higher, as they are here.
L have frequently paid II per cent. in
terest with the same class of securities
as collateral as 1 would use in the
United States in securing a loan at
per cent. 1 believe the funding DILL,
which would secure Government loan
at Az per cent, would help every bust
ness man in the community
John Ena, vice-president and fnan-
cial manager of the Inter-Island S. S.
Co, expressed the same views as Mr..
ThurstOn.
1T would be a good idea he said, |
Ito consolidate the loan if the money
could be borrowed at 4 per cent. The
Executive should be given the power to
do this The matter of discount and
commission could be arranged by the
Senate. If 10 per cent. should be con-
sidered too much, let the Senate tinker
with the laws until the proper rate is
arrived at in regard to discount and
commission. If the loan act is passed |
and it is found that the Executive does |
not want consolidation, then the law
could be left on the law books without
inflicting any harm. If money is needed /.
at any future time then the law is all
ready to give sanction. II local cap
italists are willing TO take up the loan, /
then let it be first offered here. This
would be best, as the interest would
then be kept in the country. However, /
if the loan cannot be negotiated here, /
then go 10 the United States. England /.
or any place where the most satisfac- /
tory terms may be made
z. G. Macfarlane, at one time Min /
lister of Finance under the monarchy, /
was called upon, but was not inclined /
to talk when first spoken to. He said, /
however, that the argument in favor of /
placing the loan here was incOntro- /
vertible. The interest paid on the /
money borrowed naturally keeps it /
here. IL would be an advantage TO have |
an official quotation from the London /
stock exchange. Take a quotation with .
bonds bearing interest at AZ per cent, /
would not such a recognized fact be of |
great value in marketing any industrial |
proposition? Bonds at Az per cent. on .
the London exchange would be evidence
of the stability OF the Government.
AriI &c
the best place for the loan is undoubt-
eddy here. BY all means, convert the
loan here, but do not disturb the status
of the English bonds. Leave that as it
is, for the country gains by it,
@. J. Waller, manager of the Metro
politan, endorsed the views expressed
by Mr. Thurston.
The Government" he said, has as
much right to economic as business
man. Let it get the best rate possible.
The objections raised to borrowing the
money in England amount 10 nothing.
London is the financial center OF the
world-even the United States recog-
nizes that and would not object TO it.
The loan should be placed in Honolulu
if possible. So long as the Government
shows a Willingness TO pay 8 per cent.
the impression must obtain abroad that
we'aTe not on a sound financial basis.
A lower Government rate would lower
the rate for commercial purposes, and
will consequently bring more money
into the country"
A prominent business man who did
not want his name mentioned delivered
himself as follows:
THE contention of local capitalists
that to borrow money at home and pay
per cent. interest would be better
than borrowing money from abroad at
a lesser rate of interest amounts TO
nothing more or less than making the
bulk of the population pay the differ
ence Of interest
In the lower house in the Legisla-