Honolulu Republican, Volume IV, Number 495, 12 Ianuali 1902 — BLISSFUL IGNORANCE [ARTICLE]

BLISSFUL IGNORANCE

That the views of the President of the United States are not always car-.-d .til b> a Congress of his own poal fa 'h »i!l lx* seen by the most r-<<ry reader of past executive idpb- - u?»“ and of the contemporary jour- • als of the legislative branch of the government. In is message of I>ecember 1897. I*r• d.-nt McKinley advocated: Currency reform. Refusal of belligerent recognition of the Cubans. A modification of the higher fran cbis*. in Hawaii in the event of an negation. The Hasson r*-<-iprocity treaties. N* w > st--m of government for Ala s k a That the Government should buy tie Kansas Pacific railroad. Of all these recommendations. ngl> .1 by th* Pissidfwt upon a Cony , sr devoted to the interests of his Vdminlstratlon. but two got t slatiw concurrence. There was a ■ Ktkkeepers transfer, mixed in with t l n;nn Pacific ettlement, of Kan- * Pacific ownership; and belliger- > nt rights were not guaranteed to the Cubans. though those struggling pariots soon got something better. — Pa< lie Commercial Advertiser, Jan. 10. 1902. The reform in the currency laws wn* (be second great achievement in the administration of public finances uder President McKinley, the first t-ing the enactment of the Dingley tariff. The act approved by the Pres'l ent March 14. 1900. firmly estahlish- • s the Cnited States on a gold basis. Confident** in respect to the money standard and the integrity of all our various forms of money was declared by law The uncertainties and mis-; givings of more than twenty years were dispell**d ami a broad foundation of stability and security laid. The task was a difficult one. It was a problem which required patience and courage in its solution. The fait that three years elapsed before the measure became a law revealed the difficult road over which the workers for the reform movement passed At the beginning of the first regular session of Congress under the Administration of President McKinley the Secretary of the Treasury submitted a plan the essential features of which are to be found in the a t of March 14. 1900. it was because the Republicans did not control both bran* hes of the National Legislature till the close of 1*99. that the law was not enacted sooner. Prom December. 1897. until the bill be, ante a law no opportunity was lost to advance the cause of currency reform. Notwithstanding an adverse majority in the isenate. the Committ*s> on Hanking and Currency in the House considered several measures. The work thus done in committee, while resulting ) n nothing definite, was yet of great value for the long and trying discussion served to bring about a better understanding of the intricate questions to he settled. In amticipat. n of a Republican Senate and House in the Fifty sixth Congr* >s caucus committees were organired for the purpose of preparing, during the summer months of 1899. such a bill as would receive the sup- 1 port of the sound-money majority in ‘ both Houses. When {he first session of the Fifty-sixth Congress was con vened the first bill introduced was , that agreed upon by the House caucus | committee it took Its place upon the Calendar as House bill No. 1. With 1 all reasonable expedition mea- I sure was then considered by both ! bran hes of the National legislature, and so became a law on March 14. 1900 1

Perhaps the most notable feature of the new currency law was that whiv-h related to the refunding of the national debt. The 5 per cents of 15*01. the 4 per cents of 1907. and the S per cents of 190 S. the principal of * hich aggregated $*35>.14M00. were authorised to be refunded into S per cent bonds, payable at the pleasure of the United State* after thirty years from the date of their Isaue. and payable, principal and interest, in gold coin of the present standard value The act cental ns a provision that the new i per cent bonds to be

issued in exchange for the old threes. four» and fives, should not be Issued at less than par Tb« Secretary of the Treasury was authorized to conduct the refunding operations so that the old threes, fours and fives should b<- received in'exrhange for the 3 per cents on a basis of 2’» per cent. On May 1 190" almost one-third of the outstanding th-*ee». fours and fives had be<-D converted into 3 per cents oi the new issue, thus practically securing the success of the refunding plan No other nation of the earth can boa-t of such an achievement as was the exchange of old. high rate interest bonds for bonds issued upon ro low a basis as 2 per rent. Hitherto Great Britain had been regarded as the financial Gibraltar of the world but while British consols bearing interest at the rate of 2-\ per cent per annum were selling 2 points below par. the United States was able to float a 2 per cent bond at par with ease. Such facts speak volumes for the financial strength of the United States. To float a 2 per cent bond at par of this kind means that the integrity of the dollar was recognized in the law of the land, and there was faith in the honesty of our future intentions and purposes. So much for the Advertiser's ignorance on thf' Currency Bill. Now for the Kansas Pacific railroad transaction. In the case of the Kansas Pacific indebtedness, by decree of the court an upset price on the sale of the property was fixed at a sum which would yield to the Government $2,500,000. The reorganization committee in conference with the Government declared its purpose of making no higher bid than that fixed by the decree of court, so that the Government was confronted with the danger of receiving for its total lien upon this line, amounting to nearly $13.000.000. principal and interest, only the sum of $2,500,000. Believing the interests of the Government required that an effort should be made to obtain a larger sum. and the Government having the right to redeem the incumbrances upon the property which were prior to the lien of the Government subsidy. by paying the sum lawfully due In respect thereof out of the Treasury of the United Slates, so that the United States should thereupon become subrogated to all rights and securities theretofore pertaining to the liens and mortgages in respect of which such payments should be made, the President, on February 8. 1898, authorized the Secretary of the Treasury to pay out of the Treasury, to the person or persons lawfully entitled to receive the same, the amounts lawfully due upon the prior mortgages upon the eastern and middle divisions of the road. Steps were taken by the Government Kicking to the fulfillment of this direction, whereupon the reorganization committee offered to bid at the sale of the road a sum which would realize to the Government the whole amount of the principal of the debt. $6,303,000. It was believed that no b“tter price than this could be obtained at a later date if the sale should be postponed, and it was deemed best to proceed upon the guaranty of a minimum bid which would realize to the Government the whole principal of its debt. The sale thereupon took place, and the sum yielded to the Government was $6.303.000 in cash. It will be perceived that the Government secured an advance of $3,803,000 in cash on account of its lien over and above the'sum which the court had fixed as the upset price, and which the reorganization committee had declared was the maximum which they were wiling to pay for the property. So much for the Advertiser’s blissful ignorance.