Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-01-24
CURRENCY IN PANAMA
AGREEMENT WITH THE BANKERS
EXPLAINED.

Secretary Taft was before the Senate
committee on finance today to explain the
monetary agreement entered into by the
Secretary and isthmian canal commission
with certain bankers on the isthmus. Under
this agreement the commission is supplied
with currency by these bankers as it is
needed for the payment of salaries and to
meet other urgent demands in the canal
zone, which relieved the commission of the
necessity of shipping currency from New
York. The Secretary prefaced his explana-
ton with a chronological statement of canal
affairs, including the formation of the gov
eminent of Panama and the establishment
of a currency system by that government.
The investiga ton by the finance commit
tee was instigated by a resolution intro
duCed by Senator Bailey for the reason that
the agreement appeared to maintain the
parity of the Panama coinage. This INF
preston was gained from the report of
conference of fiscal committee, the canal
commission, represented by Admiral Walk
er, the former chairman. and Secretary
Taft, which report was signed by the
parties to the conference.
The Agreement.
The agreement was made in pursuance
of this conference and the report became
a part of the agreement. The Secretary
discussed this agreement, which in part was
as follows:
That the canal commission shall make
the gold and silver coin of Panama legal
tender within the zone by appropriate leg
iSlation that this coinage shall be used in
all disbursements within the canal zone
as far as convenient; that with the CO.
operation of the republic of Panama the
parity of the fractional silver coinage with
the gold standard would be maintained by
the commission.
Wltau hiS atyra C1f
the Secretary, Il had in mind not to usurp
the treaty making powers of the United
States Senate, but my letter to the Pana-
man fiscal agents reveals the trailty of the
human memory. If / had been asked con-
corning this letter l should have said with
out hesitancy that the portion agreeing to
maintain the parity of the fractional silver
with the gold standard had been struck out
But it is there and my name is signed to it.
| must admit it.
Continuing, the Secretary said that so far
as the working of the agreement is con-
cerned no attempt had been made by the
Panaman government to carry any part of
the agreement into effect beyond that which
required the commission to given general
circulation to the coinage within the zone.
Necessity for the Agreement.
The subsequent agreement with certain
bankers by which money is supplied for dis
bursements in lieu of shipments of currency
from New York was contended by Secre-
ldIy ld1l ~ Dt ISCtSSdEy III oiueI u nave
the money on hand. He explained that
there is tendency the isthmus to hoard
silver coins, and without some surety from
banks the money could not be accumulated
in readiness to meet demands.
In explanation of his visit to the isthmus
when arrangements for the monetary agree
ment were entered into Secretary Taft said
the trip was decided upon by the President.
who thought the presence of a cabinet Off
Ger might disspate a hostile feeling that
was rising up against the United States.
This hostile feeling" said the Secretary,
through haste in organizing the canal zone,
in applying the Dingley tariff act to the
zone. That had the effect of raising wall
around territory within the republic of
Panama, over which territory the republic
had not surrendered sovereignty After a
time the republic. fearing the effect of the
Dingley act on their revenues made diff
culties for our representatives on the canal
zone
The Secretary explained at length the
character of these difficulties which were
the refusals of the republic to live up to
certain local agreements. This situation
he said, caused him to suspend the opera
ton of the Dingley act SO far as it applied
10 the canal zone.
Senator Daniel asked the Secretary if
there had been any doubt in his mind as to
his authority to suspend the operation of
the Dingley act.
NO. he said 1T was put In force by
executive order, and certainly it could be
rescinded in the same manner"
Bankers Want Better Terms.
tHe held to the opinion. despite express
sions to the contrary that the monetary
agreement, could be revoked at the will
of the canal commission.
without the consent of the other par
ties?'' asked Senator Money.
.'Oh, yes, it Is my theory that 1t is re-
vocable by our action alone 1t was
drawn with that idea in view, should it
be desirable. 1t may not be fair to the
other parties. but 1t can be DONE replied