Evening star., 1908-01-17
ANSWERS TO THE RULE
Secretary CorteIyou's Position
in Panama Bond Awards.
DISCUSSES THE AUSTIN BID
Department Reserved Right to Re-
ject Any or All Proposals.
BUT ALL WERE CONSIDERED
Proceedings Before Justice Gould
for Injunction Against Delivery
of Bonds to National Banks.
BUT ALL WERE CONSIDERED

George b. Cortelyou. Secretary of the
Treasury, today filed answer to the rule
recently issued against him at the in
stance of George w. Austin of New York
to show cause why he should not be en-
joined from turning over certain Panama
canal bonds to national banks and indi-
vduals and from refusing to accept the
bid of Mr.. Austin for s., ,OOO, 600 in bonds at
103.37o. 1t is claimed by Mr.. Austin that
allotments were made at a figure lower
than his bid.
Under the terms Of the circular adver-
tising for bids, Mr.. Cortelyou says. the
department expressly reserved the right
to reject any or all bids If deemed in the
interest of the government to do so. Upon
examination of Mr.. Austin's bid, he states,
it was found that the bidder was ''finan-
cially Irresponsible and it was deter
mined to be against the interest of the
government to accept such a bid.
Proposals were largely advertised, Mr..
Cortelyou informs the court, and due con-
sideration given to all the bids made in
response Equal opportunity was given to
all citizens to subscribe, and in the aliOt-
ment of bonds those proposals were ac-
cepted as seemed to the Secretary to be
the highest responsible bids the most ad-
vantageous TO the United States. The
Secretary says national banks were favor
ed over individuals on account of the
money strngency, the department fearing
that allotments to many individuals would
draw from the savings and other financial
institutions money needed in the conduct
of their business. .-.
Questions Jurisdiction.
Mr.. Cortelyou also attacks the jurisdic-
tion of the court. claiming that the allot-
ment of the bonds was left to his discre-
ton and the court is without authority
to review the discretionary acts of mem
ber of the executive branch of the gov
ernment.
United States Attorney Baker and As
sistant United States Attorney Stuart Nc
Namara, represent the Secretary. The
complainant is represented by Attorneys
Cuttings & Chamberln of the local bar
and. H. NJ. Earle Of New York.
Arguments on the bill and answer will
BE- held Monday next at ; o'clock
posuponement from today until that time
was granted by Justice Gould on the
application of local counsel for Mr. Aus
tin to accommodate their New York asso-
Pcia tes Assistant United States Attorney
Mcnamara opposed the delay. reTnarkng
th:;t the department would like to have
the matter disposed of at the earliest
possible time.
Substance Of the Return.
The answer of the Secretary charges
that Mr.. Austin at no time was tinan-
cially able to fulfill his bid and take
over the S3,O0O.O00 in bonds. He de-
clares the bid was speculative and not
bona fide. But even il the bid was
made in good faith. Mr.. Cortelyou
claims MFR. Austin has no standing in
court to complain of the rejection of
his bid. but is precluded from any right
in the premises by the very terms Of
his bid
He denies the allegation that ne had
allotted and expressed his intention to
turn over the balance. of $21.4:D.OOO of
bonds to divers national banks at a
priceless. than that bid by Austin, in
disregard and violation of the acts of
Congress and contrary to the terms Of
the departments circular No. iS or in
disregard to complainant's right in the
premises. This defendant states that,
as the Secretary of the Treasury. he Is
charged with the duty of superintend-
ing the fiscal affairs of the United
States, including the issuance of the
Panama canal bonds. by virtue of the
acts. Of Congress approved June %.
1902. and December Fl. 1905: that by
reason Of such duty there is rested in
this defendant as such Secretary, the
corresponding right to select such bid
ders as are substantial financially re-
sponsible and are acting in good faith,
and that this right begets discretion,
and with the exercise of this discre-
ton neither the complainant nor any
one else is entitled to Interfere. Com
piainant made his proposal for the bid
of the bonds named under the terms
of the departments circular no 6S,
wherein this defendant advertised for
proposals for the bonds. and reserved
the power is expressly to reject any
and all bids when deemed in the in
terest Of the United States SO 20 do.
Complainant's Proposal.
"Defendant received compla inanf's