New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1906-01-09
Mr.. T4FTS CRTTICISM
Sale of Railroad Bonds and Cancel
LatiOn of Food Contract.

Washington, Jan &-The letter of the Secretary
of War to the President transmitting the annual
reports of the Isthmian Canal Commission and OF
the president OF the Panama Railroad Company
together with the reports was received by the
two houses of Congress to-day. The report of the
canal commission has been made public Secre-
tar Taft in his letter advises the President that
there is to be a majority and a minority report
from the board of consulting engineers as TO the
type of canal TO be recommended. and that he eX-
poets soon to receive by cable from General Davis,
chairman Of the board, who Will meet the foreign
members Brussels January 9, a confirmation
OF the majority report. The minority report is
being prepared. he aided, and he hopes that the
whole matter may be presented for submission
10 Congress by February l.
The Secretary takes up the report of the presi-
dent of the railroad company and discusses two
transactions referred TO in the report-the issue of
bonds and their repurchase by the company, and
the Markell contract for feeding employees the
isthmus. OF these the Secretary says:
There are two transactions referred to in the
report Of the president of the railroad company OF
which special mention should be made. In De-
cembeT. a time when the creditors of the rail-
Inent Of their bills and when the railroad com
Pay %sS n4I nhss 20 ms 20 paW the rail-
road company what due 1t, the president and
had been IN the treasury Of the CORPORATION ever
since the United States acquired a controlling in,
there by the former management for the purpose
OF d5n Eoa 5e on IN N SS st the drectors
thorized the executive officers 10 issue the bonds,
and after written invitation TO several probable
purchasers they, were sold on November Il TO
one hundred and seventy-five thousand dollars Of
The purchase price was paid on NoVenp qt H.
vember a. The purchasers paid par and premium
Of Per cent for the bonds 1Sa the government
owned all the shares OF the railroad company and
cornpenys bonds was in effect to increase the in
be subjected. and in this way indirectly increase
the Indebtedness Of the government; and that such
thority from Congress. on the other hand. it may
bs out tnaI 5e company sun preserves IFS
CongTess and that under the charter the directors
pany no matter who owned the shares.
SALE OF BONDS CRITICISED
The question of issuing the bonds was not sub
aea TO the eu b or 20 Of me Ted9 a oc
selling the bonds was doubtful one. and should
With higher governmental authority I have not
the slightest doubt that the president and directors
they did. and, as they thought for the best in
enomaoUs and 6ecliar rea SI SSonslaeRs Inc
rectors and the company and the government, the
approval or mine In view of this fact S yo olr
authority instructed the president of the rail-
The bonds The. bonds themselves contained a
stipulation providing that they might be redeemed
the previous six months interest, the principal
Arrangements were made with the purchasers
on whlch s me 99nos were bought back at the
repurchase from October / To make the repur-
chase Il was at first thought necessary for the
railroad company to borrow $4,000 from the canal
commission The Acting Attorney General held
that the commission had the authority to lend
the money TO the railroad company for that pur-
pose but il was found that the indebtedness Of
The canal commission TO the railroad company was
sgi5s large enough TO supply the railroad company
without borrowing from the commission
'-The executive officers OF the railroad eompanv
have been advised OF their error" says the Score
tary In his letter to the President and hereafter
questions Of tids character will be acted upon
finally by the commission the directors of the
railroad company until after conference with the
proper authorities"
THE FEEDING CONTRACT.
Regarding the Markell contract. Secretary TAFT
segs;
another matter calling. for comment is the can
ISOLATION OF ths eo-caled Markell and sub