The Hawaiian gazette., 1906-01-16
NO QUESTION
OF LEGALITY

Thore Is no apprehension felt IN the
Executive department that Treasurer
Campbell has run against any DIM
Guilty respecting the legality of the
s750.OOO bond issue. Neither is the
least doubt harbored OF the perfect
validity of the bonds.
Treasurer Campbell cabled some days
ago for copies OF the Senate and the
House journals OF the Legislature of
1906 and the volumes are well on the
way to him. II was only an oversight
that he did not take the journals along
with him, but 1t will be remembered
that the decision of his going away
to sell the bonds was made on the
morning of the day he sailed. Hence
he left In rather a hurry.
When the last previous bonds were
marketed, Dillon & Hubbard the Ter
ritory's legal advisers in New York,
had to have the legislative Journals
authorizing the loan TO examine. The
same requirement exists relative to the
present issue of $750,000. Governor
Carriers reduction of the proposed loan
to that amount from the sum of ST.
377,O00 appropriated by the Legisla-
ture out of any loan funds that might
be in the treasury in the biennial pc
riod ending June 80, 1907, has moth
ing to do with the authorization of a
bond issue. Such authorization comes
from the Organic Act and the Loan
Act of 1903 with an amendment of
1904. One section of the Loan Act
reads:
No such bonds shall be issued, ex-
cept in pursuance of an Act of the
Legislature defining the purposes for
which the same are to be issued, nor
until approved by the President"
The Legislature of 1905 passed such
an Act, defining purposes and items
to the amount above stated, $l,377,OOO,
which went to the Governor for his
approval in the fag end of the Legis-
lature. when, as he informed the Leg
islature in a special message, he did
not have time to consider it so care
fully as he would like. The Governor,
in that message, reserved executive
discretion relative to the amount that
should be raised and expended of loan
money.
Then, in exercising that discretion,
he considered the changed conditions
ty government and made a selection
of items from the loan appropriation
bill which could be covered by loan
of $75O,0O0. An issue of bonds to that
amount was accordingly determined,
which President Roosevelt approved
and which received all the sanctions
and benefits desired from the Secre-
tary of the Treasury and the Secretary
of the Interior.
The Governor did not originate any
items, so that every item selected by
him has its purpose defined by the
Legislature. There is nothing in any
of the loan laws making 1t mandatory
on the executive to borrow as much
money as the Legislature chooses to
appropriate any more than to expend
every dollar that may be appropriated.
Every fiscal periods ending sees ap-
preparations out of both current and
loan funds lapsed and nothing done
toward carrying out their defined pur-
poses.
To a layman it would seem that If
Governor Carter is bound to see the
loan appropriations expended to the
uttermost jot and tittle-saving only
such purposes as can not, for unfore-
seen causes such as excessive bids,
delay in preparing plans or procuring
sites, etc. be executed within the pc
riod-such a fact could hardly in
validate an issue of bonds for less
amount than the total loan appropria-
tions. He would simply, under such
compulsion of legality, require only to
have another issue or a series of is
sues OF bonds made until the required
aggregate was reached. Conditions,
indeed, are easily imaginable where it
would be sound public policy to divide
the authorized amount of loans into
several issues at divers times. For
one thing, it is not advisable for the
Territory to have interest accruing up
on large amount of money locked up
in the treasury awaiting the conve-
nience of the Government to eXpend
it Then the conditions of the money
market may be such today as to make
il highly advisable to defer the bulk
of the Territory's borrowing for the
period to a more convenient season.
Treasurer Campbell may have great
difficulty in floating the loan with the
bonds at three and a half per cent.
1t is more likely that this rather
than any legal question is why no
favorable or any reports have yet been
received from him upon his prospects
of success. He is very quiet but
whether or not he is saving wood re-
mains to be seen. Neither Registrar
Hapai nor his private business repre-
sentative here has had a word from
Mr.. Campbell.