The Washington times., 1902-07-08
New York Guaranty Com
pany Would Finance
Proposed Work.
AN UNIQUE PROPOSITION
Corporation Under Government Control
Feature of the Suggestion - United
States to Own Majority of the Stock
With Deed of Trust.

James Madison Lively, vice president
of the Colonial Bond and Guaranty Com
pauy of New York, has submitted to
Government officials plan by which
the Government can finance the pur-
chase OF site and rights and construct
and maintain the Isthmian Canal
Mr.. Lively has been comforting at
Washington with Gen. Edward w. Ser
rell, General Surveyor of the United
States Engineering Corps who officially,
like MIR. Lively. unofficially. Is an old
student Of the question of al !sthmian
canal.
A Canal Company Necessary.
Nr. Lively says L Is almost a con-
ceded fact that the canal will have to
be built by an isthmian ship canal COM
papy, but the great disturbing question
has been, How could the United States
Government control and govern the ca
nal under the Constitution?
Following is n synopsis of the plan by
which he believes the canal may be
financed and the supervision of the
United States secured, under the ac-
cepted common law of ownership guar
anteed by the Constitution and recog-
nized by all nations and the interna-
tfonal treaties now existing:
Congress having authorized the Presi-
dent to appoint a canal commission. of
seven members. the sequence should be
to recognize and empower an American
1sthmfan Ship Canal Company, to which
the commission may disburse the money
as the operations according to the com
pany's contract progress.
Government to Hold Stock.
''The first act necessary" says Mr.
Lively, is to place in designated de-
pository of the United States Govern
ment majority of the capital stock of
the Canal Construction Company, to-
gether with deed OF trust for 100 years.
approved by the Attorney General of the
United States.
This deed and the majority carrying
control of the company's stock would
be the base of the bond issue. Provided
the companys stock should be $500, ,OO0,-
0oo. its directors would resolve to make |
$500, 100000 of it preferred stock and
guarantee to pay annually dividend or |
interest of 212 per cent payable semi
annually on the preferred stock, for 100 |
years into the Treasury or depository |
THE company could then issue bonds |
for $50, 600 000 under the form of what |
is termed by financiers the colonial sys-
ten, bearing per cent interest. payable
semi-annually at the United States
Treasury.
A Sinking Fund.
THE funds would provide a sinking
'und OF ! per cent Of the issue, to be
deducted annually for the redemption of
the bonds at stated periods at the option
of the holders to the amount only of
money for such redemption in the Treas
ury.
ITO secure the bonds the company
would deliver to the United States Treas
urer the $500. 600 of preferred stock"
The details of the plan worked out by
Mr.. Lively provide for payment OF the
commissioners salaries, the mainte-
nance of forts to defend the Govern
ment's trusteeship. and payment for the
tonnage tolls of the United States Gov
ernment's naval and revenue vessels
through the canal. which would thus Fay
the uniform rate established for the
private and government vessels OF all