New-York tribune., 1909-07-17
PANAMA BOND ISSUE
NOT IN NEED.
H'W Be Issued only as Required,
Says Secretary MacV edgh.

Washington. July 16-The bond resources If
the Trea4 4urv Department are ample, declared
Secretary MacVeagh in a statement issued late
to-day, and even if Congress authorizes per
cents to cover the entire cost of the Panama
Canal. less the amount already Issued the bonds
will only be issued required" The state
ment follows:
The conference Yesterday over the matter Of
bond legislatio in the new taTin bill was nov
held at the suggestion of the Secretary OF the
Treasury. The bond resources of the Treasury
Department are at present ample including S4h-
900 Of unissued Panama bonds and S1OO,0OO-
600 of unssued per cent certificates
II was. however. contemplated that the tariit
bill should contain authorization or bonds'
The House bill contained two authorlzaI IloIS'
one Of $4,000 400 Of new Panama bonds ana onS
of an additional S150,000,000 Of per cent Ger
ttfCatps The Finance Committee of the senate
at first intended to include bond legislation, but
finally decided to omit it and let that matter go
until the next session of Congress. when II II
was supposed that the banking and cuTrehCS
question would be considered and when tHe gov
eminent bond question might have TO be aiIO
gether reCOnsdered.
This decision Of the Finance Committee was
aCquiesCed in by the Treasury Department pc
cause it was matter of comparative ~ ~inal1eI
ence to it. aS il could do very well Withoui Il
new authorization The consultation yesterday
was due to the fact that the question hao c@oiIle @
to be considered by the conference connlittese, ~.
and the Trea sury Department was asked Ior us
views The preference manifested for an au-
thorization of per cent bonds 70 cover the en- :
tire cost of the Panama Canal, leSS tHe dillvu
of Panama bonds already issued was eiluIeIG
acceptable. as it would confirm the polcy OF
paying ultimately the entire cost of the Panama
Canal out of bonds It goes without saving ina
even if such authorization is made the bonds
will only be issued required
This explanation is made because OF soile
misunderstanding of the attitude OF tne treas
ury Department. -
The per cent interest is a maximum propo-
sition, the purpose being to authorize interest OF
mot to exceed" per cent. This is regarded by
those concerned in the plan for bond authorize
ton as better than fat limitation, permitting
as it does the fixing of less than 3 per cent II
found feasible while meeting the objection
raised as to the present nou-marketa bility Of
such bonds at so low a figure as per cent. 1t
is left to the Secretary's discretion within that
maximum limit and in case the issue Of any
part of the amount is determined upon at any
time the marketable conditions will, Of course,
govern.
The provision in the proposed legislation that
will govern the tax circulation will follow
existing law. National banking associations
having on deposit United States bonds bearing
- per cent interest. including the bonds for the
construction Of the Panama Canal, to secure
circulating notes, have to pay 10 the United
States Treasurer. in January and July. a tax
of one-fourth OF ] per cent each half year on
the average amount Of such of its notes in cir
cuIation are based on the deposit of bonds
On bonds paying more than per cent interest
the tax is one-half of per cent each half year
Secretary MaCVeagh devoted a considerable
portion Of to-day TO consideration Of the bond
authorization plan.
The Panama Canal bond issue occupied most
of the time of the Cabinet session to-day. Sec
retary MacVeagh presented the draft of a
measure prepared by him, which authorizes the
issuance of the bonds 10 the full extent of the
cost Of the canal.