Evening star., 1902-08-18
CAUSES OF DELAY
NO WORK ON ISTHMIAN CANAL
FOR MONTHS.
Bonds Authorized Should Be Equal to
the Two Per Cents Long
Title Investigation.

Several reasons are going to combine to
prevent anything being done for num-
ber of months toward beginning work on
the building of an i5thmian canal no mat
ter how soon the President may be able
to act in the way of selecting route.
Should the Panama route be finally select
ed the beginning of the work cannot be
made for eight or ten months. This is due
to the fact that IT Is generally believed
tMat Secretary Shaw is opposed to issuing
the Sfeej,66G0. 900 bonds authorized by Con-
gress for the canal until Congress has
made a change in the law as to the bonds
that will make them more satisfactory as
a basis for circulation of national banks.
The financial act of March, 1900 provided
that in the conversion of old bonds into .
per cents the new per cents were to have
certain advantages. One of these was that
the circulation of national banks, made on
account of these new > per cents. should
pay tax of only one-half of l per cent.
the circulation based upon other classes of
bonds being made to pay l per cent. This
advantage advanced the new per cents
to premium that was not anticipated by
Congress when it passed the law.
The Spooner Amendment.
The Spooner amendment providing for
the issuing of 1925 900 OO0 bonds for work
on the isthmian canal put these canal
bonds in the same class as all others en-
cept the regular per cents. thereby MAX
ing the canal bonds not desirable for
purposes of circulation. Secretary Shaw
feels that as these bonds would be used
almost entirely for circulating purposes
they possibly would not sell so we'll unless
giYen the same privileges the regular ,
per cents. He, therefore. will probably ask
Congress to change the law as to the canal
bonds so as to place the tax on circulation
based upon them at one-half of 1 per cent.
II is not thought that there will be any OBJ
lection on the part of Congress. but the cf-
fect of 1t will be to prevent any active
work on the canal until this change has
been made.
The Treasury Department is supplied
with sufficient cash 20 pay out ten or fif-
teen million dollars from It's cash balance
for the beginning of work. but this would
not be sufficient to enable early begin
ming on a canal unless the Nicaragua
route is chosen. If the Panama route is
selected the government will have to pay
the Panama company 4 Dric. of about $40
Ooo,oo for the canal and its properties.
The Treasury cannot spare this much froIl
it's cash balance and therefore the transac-
t1on of purchasing the Panama route can
not be completed until Congress has pro-
vided for change in the canal bonds.
Upon this change being made sufficient
bonds could be sold for the treasury to
secure money to pay the Panama company
for its property. The chances are that
even if the President should select the
of next year nothing could be done toward
completing the deal for that route until to-
ward the adjournment of the next Con-
gress.
A Long Title Search.
1t is Furthermore regarded in the treas
ury and financial circles as doubtful
whether the President will be able to act
for long while because of the long and
searching investigation that Will be made
Ny-
Department into the legal rights of the
Panama company TO Sell their property to
the United States. A month ago II was
expected chat Attorney General Knox
would sail for Paris about the first of Au-
gust to begin investigation into the
legal titles of the Panama company. His
departure has been postponed from time to
time, and 1t is still not known when he
will sail for France. His representative,
Charles w. Russell, is now in Paris max
ing a preliminary investigation, and will
report to Mr.. Knox before the latter sails
for Europe. After Mr.. Knox arrives in
Paris long time Will intervene before he
Will be able to make a complete report
upon his investigations and return to this
country. He will have to make out his re-
port to the President a. 70 the status of
the entire matter after his return. On top
OF that the President must have from the
State Department treaties with the South
American countries through which the
Nicaragua and Panama canals would be
built. All these things require so much
time that it is considered impossible that
the President can reach a conclusion as to
which OF the routes should be taken before
some time in December. and it is still
further possible that other questions may
arise from time to time which will delay
any decision by him until well into next
year In the meantime, Secretary Shaw
Will recommend to Congress the proposed
change of the new per cents and every
thing will be ready some time next spring
or summer to commence work unless uuex-
pected questions arise before then.