Daily Kennebec journal., 1906-01-09
ON The GIGANTIC TASK OF The ACE.
False Accusations and Stories Dis
posed Of===WOrk Well Planned
and Being Carefully Executed.
THE CANAL REPORT.

Washington, Jan. S.-Thc letter of
the secretary OF war to the President
transmitting the annual reports Of the
ISthmi.n Canal Commission and of the
president of the Panama Railroad Co.,
together With the reports were received
by the two houses of Congress today.
The report of the canal commission has
been made public Secretary Taft in
his letter advised the President that
there is to be a ajority and Il minor
ity report from the board of consult
ing engineers as to the type of canal to
be recommended, and that he expects
soon to receive by cable from General
Davis, chairman of the board. who will
meet the foreign members in Brussels
on Jan. .. Il confirmation Of the majori
ty reports. The minority report is be-
ing prepared, he added. and he hopes
that the whole matter may be present
"a for submission to Congress by the
first Of February. The secretary takes
up the report of the president of the
railroad con. pany ana discusses two
transactions referred to III III" report
the issue Of bonds and their r"-pur
chase hy the company and th" market
contract for feeding employees on the
iSthmuS. OF these the secretary says:
There are two transactions referred
tu in the report Of the president Of the
railroad comrany Of which special men,
tion sould be made III December. ut
n tim" when the creditors of tho rail
read company WAS not able to meet its
obligations because the canal commits
sion were unable to pay the railroad
Ir,,t
ana directors sold 6,S one thousand
dollar Az per cent. bonds which had
been in tn" treasury of the corporation
ever since the United States acquired d
controlling interest i'll its shares. Tho
bOEds h;l been placed thor" h. the
former management for the purpose Of
using them in oricr to improve the
equipment Of tho road. ON Nov. 8
last. the directors authorized the OK
ccrtiv" officers to issue tho bonds. and
after written invitation to several pro-
bal'ln purchasers they We're sold on the
18th day "f November to Macllay &
Co.. bankers. as the highest bidders.
One hundred and Snvcnty-fEC thousand
dollars "f thr purchase price was paid
on November II. though The bonds were
not delivered until the 2ith Of Novcm-
bcr
The purchase paid par and a pre-
MUM If :, per cent. for the bonds.
1t has Iccn suggested that as the
government owned all the shares of the
raill Dad company and was in fact the
owner of the road, the sale Of the COM
PAWS bones was in effect to inCreOS"
the Indebtedness To which The govern
mcnt property might be subjected and
in this way indirectly to increase the
Indebtedness of the government and
that such power ought to he cXer-
ciScd without special authority from
Congress. On the other hand. it may
be pointed out that the company still
preserves its character as u corporation
by the aCquicSccnCc of Congress. and
that under TIL" charter the directors
had the power to issue the bonds and
binl the company no matter who own
ed the shares
The question of issuing the bond was
not submitted to you or to me before
final action was taken by the board of
directors. The policy of selling the
bonds was q doubtful one and should
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