New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1909-08-30
TARIFF ACT FINANCING.
National City Bank Circular Dis
cusses Bond Legislation.

The September circular Of the National CITY BAN.
Is devoted mainly 20 discussion CT the bond lesis
latton contained IN the tariff act which IL
says. is disappointing in respects especially
TO the holders OF S31,Ooo.oo Panama 2s now out
standing The equities OF these holders the circu-
lar says, were lost sight OF by Congress when n
granted authority TO issue ssoO0GO0o more Panama
bonds at rate OF interest NOT exceeding 8 per
cent without in any manner adjusting the tax on
national bank note circulation protect the pre-
vtous issues bearing lower rate.
The result is. IL adds. that the authority covering
another issue OF Pananlas. the proceeds OF which
might well be used to advantage now 10 reimburse
the Treasury for canal expenditures already in
CURED. is practically a dead letter The circular
states further that Panama loan at 8 per cens
without some measure OF discrimination in favor Of
the Is already issued. would send the latter below
par. This is contingency. IL says, which should
and no doubt will be avoided.
Speaking OF the temporary financing authorized
by the government. the circular says:
But while the failure to do the right thing IN
SenoT Nv win 1ne Panama authorzalion is 70 BE-
otner feature OF the act which really marks inn
act Increased the limit OF Der cent csrtcates ~
tndsndedness which may be issued from Soo.oeso
which is important. but by re-enacting Section 81
S Ine war revenue act Of 1sss Congress has put
There is now. therefore a live AUTHORIZATION which
eayil as TO It's validity. ana there is moreover.
IbsSiaIivs confirmation Of such use as has already
OF 1893 " S1a-~ ~ 7 ~
IL will be recalled that In the midst of the panic
OF 1877 the Secretary Of the Treasury announced
that IN addition 70 sale OF Panama bonds he
would issue certificates OF Indebtedness under Sec
ton 81 or the old revenue act. which. had not
oeen abrogated when the Spanish Schedules
We're repealed The right to resort 10 this alI-
thorlty. almost forgotten until great emergency
arose, was fully sustained ar the time by the LAW
otrcers or the government and by leading Treasury
ocials. but here and there throughout the country
there was suspicion that the statute was more or
less obsolete and that only crisis justified its use
thiS respect but whatever vague apprehension did
exist rs forever removed by the act OF August :
1909. in re-enactng Section s2 and by raising The
limit OF these cent certificates from 800 lrco
to 500 100000.
Nor Is this the most valuable feature OF the bond
legislation in the tariff BY confirming the
old authority in the act of 1S9S distinct rscogni-
tion IS given To the plan of doing a part OF
government financing by means OF temporary loans.
This at once has added fexibility our fiscal
system a quality which il has lacked in less
degree than our currency system lacks elasticity.
With unquestioned authority to issue short time
obligations. not TO exceed year. the Treasury Is
IN position TO handle the loan account as
temporary borrowing instead OF being compelled
perhaps to issue long time bond TO cover the re-
quirements of a brief season. II. in addition TO
fexi5ility IN public debt accounts. there
injected into the currency system element OF
elasticity and then II revenue system also al
mitted OF a little hexibility, that by a slight
increase decrease in taxation the necessities Of
each years expenditures could be met most OF
worst problems would be very much simpliaed.