Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1905-08-25
MONEY FOR CANAL.
Present Appropriation Will LAST Until
Late in December.

lby Congress for the beginning of work
on the Panama canal a sufficient bal
ance to carry on the work until late In
December, by which time Congress Is
expected TO take some action provid-
ing for more funds. Prompt action
will be necessary. too, to prevent some
embarrassment in the pushing Of the
construction.
The Spooner bill, under which the
work up to date has been carried on,
and as to the legality Of which there
has been doubt, provided for the ex-
pendlture of $4,000 900 In cash out Of
the t, easury and the issue Of s135, 000,-
900 in per cent. bonds. When Mr..
Shonts was placed at the head of the
canal commission he appointed COM
mittee examine the status OF the
cash at the demands of the commission.
1t was found that there vas balances
Of about $4,000, 900 on hand. Chair
man Shonts ordered that this be so
divided as to run until Congress had
met, and his instructions have been
carried out. Owing to much additional
work and the furnishing of new ma
chinery and material the balance has
lively little left. but it is proposed to
make this run to the time fixed.
According TO the provisions Of the
Spooner bill bords could be issued at
once, but there is no desire to do this,
for several reasons. The main one Is
that if the bonds We're issued as di-
rected in the bill they would bring less
than par and it is desired to make
them bring above par, If possible. TIE
present per cent. securities of the
government sell at about 104, but this
is due to the fact that when they are
used as the basis for national bank
circulation the bank pays only one
half of 1 per cent. as tax, whereas cir
culation secured by any other class Of
government security must pay 1 per
cent. taxation. The difference of one
half of l per cent. Is sufficient to send
the bonds above par, as the greater
part of the outstanding Is are used as
security for circulation. OF a total of
s479.607. 290 of bonds pledged TO secure
national bank circulation the amount
of IS is s+56673,50O. More than half
of the amount of bonds pledged to Sc
cure government money deposited with
banks is in % also.
It is the supposition that Congress
intends to give the cana! per cents the
same advantage as to circulation az
the existing 2 per cents, and this can
be done by suitable bill reported by
the finance committees and duly
passed. Without this advantage the
bonds will sell, it is declared, for below
par, which would not be desirable.
There have been suggestions in 4
good many quarters that Congress may
withhold bond issue for several years
to come and use some of the money on
deposit with national banks, but this
now looks improbable in View of the
fact that the governments balance
with the banks has been gradually
dwindling for nearly two years. until
it is now down to about s57 500, 900. In
view of the fact that this year promises
another large deficit, it IS regarded as
certain that Secretary Shaw will have
to call on the banks for a return of
more money to carry on the business of
the government, which would not leave
great deal for use on the canal.
Even in years Of hard times it has been
customary for the treasury to have
with banks as a matter OF precaution
in exigency and likewise to oblige some
banks that go out of their own to
handle business for the government.
Without some deposits these banks
would not handle the unsatisfactory
and Improbable business of deposits
by collectors of internal revenue and
others.
The idea has been that Congress
would not consent to issuing bonds and
paying interest on them when there is
money with the banks that could be
used-at least. a goodly sum. With this
money, however, used to meet the de-
felt that is promised this fiscal year.
there will not be much to spare for
canal work. and the probabilities seem
to be that Congress will put the canal
bonds on the same footing as the exist
ing IS and let them be issued to provide
the funds that will he needed imme-
date after Congress gets down to its
regular session.
There is no intention on the part of
Secretary Shaw. if the details of the is
sue Of the bonds is left TO him. to put
the entire s135. 900. 900 on the market.
Ahde "ouio pe ioohSh AZ 'ha' 'he SoH-
eminent would have to pay interest on
a sum which it would merely be hold
ing in its vaults AMI keeping out of
trade channels. The bonds will be put
on the market in sums that seem to
offer the best inducements to probable
purchasers, say from s10,c00,000 to $25,-
900, 900 in batch. AS more money is
needed by the canal commission, more
bonds will be sold.