CONGRESS. (THE NICARAGUA CANAL.) 



203 



in progress of spending more money.' They went 

 on until they spent over $4,000,000 in that way. 

 They said: 'We can not get money on better 

 terms than these.' The times were not quite so 

 flush as they are even now, and it was difficult to 

 raise money. 



" Then the proposition was put to them in a 

 secret session of the committee the secrecy has 

 all been removed ' On what terms will you con- 

 sent that the Government of the United States 

 shall raise this money for you you say it will 

 require only $83,000,000?' They said: 'We are 

 not able to state what terms, but we will say 

 this to you, that when we are reimbursed for 

 the money we have expended, when we have a 

 fair price for our concessions, as was stipulated 

 in the body of the concessions themselves ' (6 

 per cent, is what they are entitled to out of the 

 capital stock of the concern), 'when we are re- 

 imbursed for these things, we will be willing to 

 let the United States Government take it.' 



" The matter went on and was considered for 

 some time, but it was not the proposition of the 

 Maritime Canal Company at all. It was the 

 proposition of the Committee on Foreign Rela- 

 tions. ' What would you say if the United States 

 should guarantee your bonds for $100,000,000 at 

 3 per cent. ? ' It was asserted then by Mr. Sher- 

 man, a great financier, that they could get the 

 money on bonds at par. 'What would you say 

 to a proposition of that kind?' They said: 'Of 

 course we have told you we would accept it. Re- 

 imburse us for what we have had to expend, and 

 you may take the stock in pledge or you can 

 take the stock in purchase.' That committee 

 preferred to take the stock in pledge under an 

 actual mortgage to be recorded in Costa Rica, 

 Nicaragua, and the United States, with powers 

 of foreclosure on breach of condition, and so on. 

 " It was in that way that the proposition to 

 get money upon the bonds came forward. They 

 were not the kind of bonds that were objected to 

 by the gentlemen who belong to the Silver party, 

 of which I am a member, and I hope an honest 

 one. They were not the kind of bonds that the 

 bankers could take and operate upon and secure 

 money on, and it was therefore supposed that 

 they would be preferable. They were bonds of 

 a kind that the people would like to invest in, 

 arid the sums were made small. The object was 

 to raise the money by popular loan, as we did 

 here in the beginning of the Spanish war. It was 

 thought that the bonds would be valuable in 

 that regard, and would induce the people to take 

 a general interest in the canal. 



" Now, the bond feature got into the legisla- 

 tion at that time, and it went on naturally and 

 without objection, and nobody hitherto has ever 

 put this question until the Senator from Texas 

 raised it on the floor to-day. W T hy is it that 

 we would prefer to indorse or guarantee bonds 

 to the issue of straight bonds or an appropria- 

 tion of money? The matter has gone on, and 

 of course some of us, including myself, would 

 prefer very much a direct appropriation of money 

 to the issue of any bonds at all, for I have a 

 sort of repulsion in my heart or judgment against 

 the issue of bonds. Why should we not appro- 

 priate the money out of the Treasury instead of 

 issuing bonds? 



" The opportunity of making that* appropria- 

 tion without raising the cry of direct taxation 

 on the people was never presented until during 

 the last session of Congress. At the last session 

 of Congress it turned out that by judicial deci- 

 sion and by legislative action $68.000,000 in 

 money for the Union Pacific Railroad Company 



indebtedness found its way into the Treasury of 

 the United States after a hard fight, as we all 

 know, and a provision was put upon one of the 

 appropriation acts which authorized the settle- 

 ment of the Central Pacific Company indebted- 

 ness on the same basis precisely as that of the 

 Union Pacific, which would yield $59,000,000; so 

 that the two together amounted to $127,000,000, 

 which I believed, in my own judgment, was fully 

 sufficient to build the canal under anybody's 

 estimate. 



" Thereupon the committee incorporated into 

 the bill the alternative provision that the Presi- 

 dent of the United States might resort to this 

 fund, appropriated for the purpose, whenever in 

 his judgment he thought it was better to do so 

 than to guarantee bonds or to sell stock; and 

 these three methods are now in the bill. We 

 can guarantee the bonds of the company and 

 issue them, sell them for not less than par, or 

 we can sell $22,500,000 of stock, of course at not 

 less than par, or we can resort to this fund now 

 in the Treasury or which may hereafter come 

 into the Treasury, which is tantamount to $127,- 

 000,000, for the purpose of raising the money to 

 build the canal. 



" I thought, and the committee thought, that 

 leaving this sum optional, to be resorted to by 

 the President in either of these three forms, would 

 perhaps be the wisest legislation we could adopt, 

 and the bill has exactly that shape. But my 

 preference is still that indicated by the Senator 

 from Texas a direct appropriation of the money, 

 to be taken out of that fund or any other fund." 



Mr. Harris, of Kansas, said on the same theme : 



" My idea has always been that this was a 

 work of too great magnitude to be intrusted to 

 any private individuals, even if it was possible 

 for them to complete it. It involves relations 

 which are too vast in many respects, I believe, 

 for the control of it by private individuals. 



" I have been absolutely in favor of Govern- 

 ment ownership of the canal. The committee, I 

 think, shared in that idea, and wanted, if 

 possible, to get at the most intimate connection 

 on the part' of the Government with this sub- 

 ject. The door of direct negotiation seemed to 

 be closed, and there was but the one thing which 

 is suggested by the letter of the former Secre- 

 tary of State, and which has practically been 

 suggested by the President in his message, it 

 seems to me, that the only door open to us is 

 through concessions still existing and belonging 

 to a company which had received a direct char- 

 ter from this Government, and in whose behalf 

 it may be said these surveys have been authorized 

 and made by the Government of the United 

 States, or at least in connection with and under 

 and by virtue of their concessions. 



" There was no desire on the part of the com- 

 mittee to have the Maritime Canal Company, in 

 their individual character in any way, shape, or 

 form, connected with this enterprise, but the idea 

 was to get rid of them, to treat them fairly and 

 justly, to secure the advantages of their conces- 

 sions as an open door through which we might 

 enter upon this arena, a way by which we could 

 get our feet upon the ground, and then that we 

 should be enabled in the subsequent carrying on 

 of the work to negotiate directly with these 

 people. 



" The bill as it now stands provides in section 

 3 for a commission which shall ascertain the 

 value of whatever these people have. It uses 

 language that I think is fair, that can not be 

 objected to by any one. No matter what may 

 have been the sins* of omission or commission on 



