The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1908-01-14
BOND QUESTION
COMES UP AGAIN
Report of Secretary CorteIyou
on His financial Deals Due
in Senate Thursday.
TILLMAN MAKES INQUIRY
RoTTENNEss APPEARS ON THE
SURFACE.

Washington. Jan. 15.-Afser a short
discussion in the senate concerning the
recent bond issue Of the treasury de-
partment il was agreed before taking
up the question in detail to await a re-
port from the secretary of the treas
ury. which Senator AIdr}ch assured the
senators would be before them on next
Thursday. Mr.. Clay Of Georgia asked
whether the. secretary would be re-
quired TO make a report of these facts
by law. Mr.. Aldrioh replied that he
believed he was so required. but there
was no provision Of law STIMULATING
how the report should be made
Mr.. Culberson insisted that the duty
Of the secretary under the law was to
make such a statement on or before
January ], for the preceding year. con-
corning deposits Of public money. He
SAID he had not seen any such state
ment,
Documents Presented.
Mr.. Tilman referred to two resolu-
tiOns by him which had remained on
the calendar since December ., calling
for information concerning clearing
house certificates and the bond issues,
and said he thought it would be best
TO let them go To the committee on fl
nance without attempting to pass
them without reference to that COM
mittee. He said he wished to lay some
correspondence on this subject before
the committee. and read from the vice
presidents desk a letter from Georgia
II. KlOebers Of Wilmington, Dial,
stating that he had bid an average Of
104 II for $4,000 Of Panama bonds and
had not been awarded any Of them, al
though they had sold for 1O2 IL.
Mr.. Tillman wanted to know how 81
happened that the bonds had been sold
TO the banks at a lower price and de-
MED to citizens who bid higher for
them.
Little Fish SUIT Out.
He also read letter from Assistant
Secretary j Edwards of the treasury
department to Mr.. Kloebers, as fol-
lows.
In reply to your inquiry of the 18th
inst. you are informed that individual
bidders whose bids were greater than
1000 We're not allowed any bonds"
He also read another lettc. from a
correspondent in Augusta. Ca, who
wanted to know how il had happened
that the secretary places vast cur
rency in New York banks to relieve
the financial stringency while these
banks charge 1 IA per cent premium
on this money to southern banks. The
stringency seems to be a source Of
profit to someone" Mr.. Tillman's cor
respondent added.
Mr. Bailey Of Texas wanted to know
whether Mr.. Tillmans Delaware cor
respondent was the man who had IN
stituted a suit against the secretary Of
the treasury in the matter % the
award Of these bonds.
Mr. Tillman did not know whether
the Injunction suit had been brought
by his correspondent.
Remarkable Feature.
AS some courts have been so glad
to issue injunctions." said Mr. Bailey,
I think they would be glad Of an Op-
portunity in this case. I think this
course on the part of the secretary al
the more remarkable i'm view of tie
fact that the purpose was to attract
the money that was in hiding. They
might attract it from places where
citizens had it. but not from the banks.
A part of the understanding under
which these bonds were issued was
that $50 per cent of the money received
from their sale would be left on deposit
with the banks.
IF that be true" he declared. the
banks received from the government {
interest at the rate of 30 per cent per
annum."
Continuing Mr.. Bailey added.
Bonds Sold at 1o2 a.
THE government sold these bonds
at I02 - and deposited i'm the banks
80 per cent Of the purchase price. 50
that the SO paid on each bond actually
drew interest at the rate of 30 per cent
per annum. 1t was not intended that
this money should be used for the
Panama canal, but it was to relieve
the financial pressure. Under that
plea, with that profession on his lips,
the secretary seems to have declined
the money which individual citizens
were willing to take from their trunks
or other places Of hiding, and turned
the bonds over to the banks at 80 per
cent DER annum.'
Mr. Tillman remarked that he would
wait for the secTetary's reply.
Mr.. TflImans resolutions were re-
ferred to the committee on finance
and the discussion of the financial
question was suspended awaiting Sec
rotary CortelyOu's response to the SEN
ate inquiry