The Richmond palladium and sun-telegram., 1911-01-30
PANAMA BONDS ARE
Being CONSIDERED
Secretary Of Treasury Decid-
ing Whether They Shall
Be Issued.
Ov aopea,ck CLIFFORD.


~ RoogRlck CLIFFORD.
Washington, Jan. 30.-secrctary Of
Tho Treasury, Macveagh IL consider
1ng whether or not this government
should issue 100000 OF Panama
Canal bonds. the remainder Of the 10
sue authorized by congress. The sug-
gestion was made ut a cabinet meet.
ing by the secretary and was approx.
cd by President Taft. that the bonds.
n issued, should be offered to the In
vcsting public without circulation
privileges attached. and made into
demonstrations OF small value. The
whole question will be put up to con-
gross for consideration at later date.
The outside cost Of the Panama
canal has been approximated at 1885,.
100000. Expenses incident to work
already completed and contemplated
for the next several months have been
met by money advanced from the gen.
crsl fund OF the Treasury Department.
with the exception OF about $34, 100000
obtained by former Secretary Of the
Treasury, Cortelyou from sale Of
Panama bonds bearing interest at the
rate of 2 per cent. As the remainder
Of the authorized bonds have not been
offered for salo. the general fund OF
the treasury has been drawn on to
the extent OF about s133.399.S26. or
about S3.000,00O per month.
To Cover . Deficit.
II II the present intention OF Treas
ury officials to reimburse the general
fund OF the treasury to this extent
from the sale of the remainder Of the
Panama bonds. This will. In part.
cover the deficit In the treasury
which has existed for several years.
Tho idoa that prompted Secretary
Mscveaeh to ask that the circulation
privilege be withdrawn from the con.
tcmplatcd bond issue. Is that II would
prevent an undue extension OF bond
secured currency. and would ensure
tho maintenance at par Of government
bonds already outstanding. The step
contemplated. II is said is nothing new
In financiering. and does not involve
any risk Of impairing existing obliga-
tions of the government. Further
more. Il ia contended. that II this step
IL taken the S73O.s22.130 OF govern
ment bonds issued at 2 percent would
then hold their maket value.
In support Of the idea advanced by
Secretary Macveagh to withdraw the
circulation privilege on these bonds.
officials Of the Treasury Department,
who act as Mr.. Macveagh's financial
cabinet, soy there is no reason to H.
nance the Panama canal out OF the
general funds OF the government.
Hence there In no connection between
tho expenditure Of funds to pay for
canal. and the country's circulating
medium. Currency, Il IL pointed out.
10 already too redundant as indicated
by rising prices the world over.
Gold Causes Increase.
The general rise In prices through.
out Europe and In this country. ac-
cordlng to Information obtainable by
financial experts and statisticans, IL
due to large increases In gold produc-
tion. and In the increased circulation
Of currency notes In the United States,
the immense increases in gold produc-
tion have added great deal OF addi-
tional wealth to the money supply.
hence In this country and to much
less extent abroad. the money supply
cannot be controlled. Unnecessary
additions to the currency OF nation
can be controlled. however. II q wise
ADMINISTRATION Of the finances il ex-
crcised by the government. says Sec
retary Macveaggh.
To accomplish these resnlts. Secre-
tary Macveagh wants congress to give
him the necessary authority to issue
. certain amount. of Panama bonds
a IN experiment. and. II It should be
successful. to place the whole issue
before the public In the same manner.
This necessarily means that the Sec
retary will have to take the responsi.
lbility OF floating big loan. which II
met by the investing public and finan-
cial interests Of the country. would
stamp Mr.. Macveagh az one Of the
leading financiers Of the administers.
tion and add considerable prestige -
the Republican cause In the next
Presidential campaign.
The National Monetary Commission.
Of which Senator Aidrich 10 chairman,
win. Il IL said. propose plan to Con-
gress looking to the reorganization Of
the bank note issue. pending Issue Of
bonds and other methods OF finance
QlAAlH~A N AaA2