The Washington herald., 1910-07-10

Owing TO lack OF legislation by Con-
g-ess the Treasury Department will be
forced to continue the unsatisfactory
form of bonding public officials during
the first half of the current fiscal year.
Congress left the surety bonding sit
uatiOn resting upon the foundation fur
nished by the Tawney provision In the
urgent deficiency bill CT last year There
was a failure 10 get from the experts
who have been at work upon the bonding
question any report as 10 the result
OF their labors and TO rectify the con-
ditions which the Tawney provision pro-
duced.
The Treasury Department is now In
charge OF all the governments bonding
WORK. that duty being transferred from
the Department of Justice. 1t is in some
d @ficulty about the best way OF avoid
ing the troubles which have devolved
upon il because OF the failure OF the
legislative body 10 act
No Funds To Prove Companies.
one difficulty grows out of the fact
that the absence Of legislation leaves
the department with no funds available
for the examination of companies which
have newly organized or which have just
presented themselves as candidates for
a share OF the government business. The
law requires that such companies shall
be inspected and shall have licenses Is
sued 20 them by the government before
they begin operations.
The only way IN which this can now
be done seems 70 be that OF allowing the
companies TO provide the funds 10 pay
for their own examinations. which is un-
desirable from several standpoints. This.
however, is what the department seems
likely TO be driven TO. In that way the
new companies will be enabled 20 quail
| fly Furthermore the department Is
| having difficulty In fixing the rates that
the new companies can be allowed to
charge. The Tawney provision stated
that 40 bonding company should - al
| lowed to charge for bonds more than
/ IS per cent in excess of the premiums
they had charged during the preceding
year.
Provision Should Expire.
| Although theoretically this provision.
which was part OF an appropriation bill.
should expire with tho bill of which it
| formed a part. it Is understood that the
| department VIII endeavor to keep up the
/
OF something qpproximating IT, It is not
yet determined how the premiums of the
new companies will be fixed or limited.
| Meanwhile the experts who We're en-
piJyed at large salaries by the commits
| sion appointed by Congress 10 look into
the bonding matter have prepared pre-
liminary report of the work of the past
year. but II is now given out that the
! experts have succeeded in prevailing upon
the commission TO authorize an "exhaus-
tive" investigation which may last two
years, and viii attempt 10 bring in the
! experience of European countries as well
as the experience of the United States
which was all the organization originally
intended to do.
VIII Defer All Action.
This plan. If adhered to, win greatly
defer the final determination of the insur-
ance system which is to be adopted. and
in the judgment OF some officials makes
1t almost impossible to put the bonding
system OF the government upon any sat
isfactory basis.
The organization and control OF tbs
bonding system in the Treasury viii
meantime remain the same as In the
pas. pending the development of a def.
mite system OF bonding, and 1t was an.
nouneed to-day that the division of bond
ing which it had been Intended to create
VIII not be established for the present
The companies have been against the es.
tabHshment of this division of bonding
because they have assumed that the chief
would be one who was obnoxious TO then
and who mas been active in connection
with the bombing investigations.