Watertown republican. [volume] (Watertown, Wis.) 1860-1906, 1906-01-10

fetaIy Oh w df 1dlI, III his report to Con
gress on the Panama canal. advises the
President that there is to be a majority
and minority report from the board of
consulting engineers as to the type of
canal to be recommended, and that the
whole matter may be presented for sub
mission to Congress by the LIST OF Feb
ruary.
Bond Sales and Employees Food.
The secretary takes up the report of
the president of the railroad cOmDan,y
and discusses the issue of bonds and
their purchase by the company, and the
market contract for feeding employees on
the isthmus. He says:
In December, at a time when the credit
ors of the railroad company were urgent in
demanding the payment of their bills and
when the railroad company was not able 70
meet it's obligations because the canal com,
mission was unable to pay the railroad com
pany wnat was e Que It, the president and
bonds, which had been in the treasury of
the corporation ever since the United States
acquired controlling interest in it's shares.
The bonds had been placed there by the
former management for the purpose of
using them in order to improve the comm
ment Of the road. On November last the
issue the bonds, and after written invita-
ton to several probable purchasers they
We're sold on November II to Mackay & Co.
bankers, as the highest bidders One hnn,
dred and seventy-ive thousand dollars of
the purchase price was paid on November
IL, though the bonds were not delivered un.
III November "A. The purchasers paid par
and premium of per cent for the bonds
Comments Against the Deal.
1t has been suggested that as the aorern
ment owned all the shares of the railroaa
company and was in fact the owner of fhe
road, the sale of the company's bonds was
in effect to increase the Indebtedness to
which the government property might be
subjected and in this way Indirectly to in
crease the Indebtedness of the governments
and that such power ought not to be exer-
cised without special authority from Con
gress. On the other hand, it may be point
ed out that the company still preserves its
character as a corporation by the acuuies-
cence of Congress and that under the char
ter the directors had the power to issue the
bonds and bind the company, no matter
who owned the shares.
The question of issuing the bonds 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 a doubt
full one. / have not the slightest doubt that
the president and directors of the company
acted in entire good faith, but CONSIDERING
the anomalous and peculiar relations be-
tween the directors and the company and
the government, the bonds should not have
been issued without your approval or mine
In view of this fact, by your authority, /
instructed the president of the railroad
company to proceed al once to repurchase
the bonds. The bonds themselves contained
a stipulation providing that they might be
redeemed on October /, or April l. by the
payment of the previous six months inter
est. the principal and premium of 5 per
cent
Bonds Were Purchased Back
Arrangements were made with the pur-
chasers by which the bonds were bought
back at the premium paid, 105 and accrued
interest TO date of repurchase from October
j. 10 make the repurchase it was at first
thought necessary for the railroad company
to borrow 100000 from the canal commits
sinn.
The acting attorney general held that the
commission had the authority to lend the
money 10 the railroad company for that