Evening star., 1916-03-26
BY I. A. FLEMING.

The passage of the act in the senate
giving the Philippine Islands practical
independence within four years, and the
approval of the same measure by the
committee on insular affairs in the
House. has stirred up great activity
among bankers and bond houses. as
well as on the part of individual hold
ers of Philippine bonds, with view OF
impressing upon the government the
Justice of the claim of the holders that
these bonds are a direct obligation on
the United States.
These bonds were authorized by Con-
sress, or rather approved, by three
separate acts. July /. 1892, when 81
600 600 land purchase per cent oonos
We're approved; when $125.00o per
cent bonds were authorized for build :
ing Cebu'S sewer and water system and
for public school purposes. and in all
S1S125. 900 per cent bonds, sold IN
four blocks, as follows: Seven mlliloil
dollars land purchase bonds. sold at
1O7.577; $4,000 900 public Improvement
issue, average 1886, 100000 Ma
Mia sewer and water bonds, 1O5.ss91 ,
SIPS. 600 city of Cebu sewer and school
bonds. 2.003o.
The average price received for these
bers, $l,0S3,2I5 in excess OF their lace
value.
Bond houses and bankers claim that
this premium, this borrowing of funds
at interest rates which are available to
the United States, was due entirely TO
the fact that it was supposed that the
government was back of them.
The American Congress approved of
the issue. agents of the American gov
ernment in control in the Philippines
-
ment guaranteed the interest.
BY authority of the United States a
sinking fund was provided FOR the re-
tirement of the bonds, Il per cent an
l, 1911. to July ], 1921, and ! per cent
on the outstanding bonds from July /,
1921, TO 1881.
\ sinking fund was provided for the
retirement of the bonds. and in this
fund December 81, 1914, there was
.444O2337 which was further in
creased at the close of 1915. leaving
about 100000 to be taken care Of
between this time and 1899.
An advertisement askin~ for bids on
the s7.000.000 Philippines land-pur-
chase bonds by the Dureau of insular
affairs through its chief, Clarence X.
Edwards, said: The integrity of the
issue has been passed upon by the At
torney General of the United States"
This was the authorization issued:
The pledge of the faith and credit
of the Philippine government, cover
ing the due application of the proceeds
of the loan and the maintenance Of the
sinking fund rests, then, upon author
ity explicitly conferred by the national
power; and, while in the strict and
legal sense the faith of the United
States is not pledged as d guaranty for
the payment of the loan, or for the due
use of the proceeds. or the observance
of the sinking fund requirements, the
entire transaction is 10 be negotiated
under the auspices of the United States
and by its recognized aid
1t was also announced by the insular
bureau that the bonds would be ac
cepted at par for deposits and could
be substituted for government bonds
now on deposit with the Treasury.
These facts have induced holders Of
the bonds and some of the houses re-
sponsible for their distribution 10
make a strong plea TO Congress for the
assumption by the United States of full
responsibility for the several issues.
Committees of Washington bankers
have taken the matter up with repre-
sentatiVes and senators. They believe
that unless the government assumes
the responsibility. that their bonds.
less the sinking fund availa BILE at the
time of extending autonomous govern
rnent TO the Philippines. will be placed
in hazard and rendered worthless. The
price today is but fraction of the
millions realized at the time Of the sale
and there is 10 demand for the issue.