The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1872-03-11
The Premium on United States
Bonds.

y AOhA hhO ShAS1ap
The public debt statement fof February
shows that $40 O00, 900 OF the b POS 81
1862 have been called ior redemplion al
par In gold, and that $50, nj, 6bl have
been redeemed and deducted. Thofe are
still $347, 5l7, 100 Of the 1962s outstanding,
and on this amount, as well as on the
$40, 100000 called In, the redemption
has had the effect 10 depreciate their
market value something over one per
cent in gold. Before the $l40OOO,OOO OF
these bonds were called In, the 1S02s
were worth d fraction more than the
1908 or 1885,. now they are worth one
per cent less IN gold than the 1868 or
1865, and four per cent less than the
lSGls. Thus the lSSfs, quoted now In
currency at 1l5t, and with gold at, say
ITO, are worth l05 In gold, and deductlng
four per cent for accrued interest, makes
the net price for the bonds 104 In gold.
The 1865, quoted now ut nearly li2 in
currency, are worth nearly 10l lin gold,
exclusive OF interest; while the l862s are
worth scarcely 100 ngold exclusive Il
accrued interest. The total depreciation
Of the $4G5, $4,000 Of the 1sO2s which
w.ere outstanding siS months ago, caused
by the calling In Of aportion Of them for
redemption, has been, in the aggregate.
not llcss than S5,OO0,OOO. This Is The loss
experienced by the holders Of the 6,20s OF
1863 In consequence OF little over one
fourth Of them having been called for re-
dclnption at par. aud 30 rD!slytI lirra
The decline Of so large q mas Of 5'20s
Of 1909 has, however, affected 10 some ex.
tenlthe prices Of the Other bonds, and II
p probable thatthe total loss to the hold
crs Of United States bonds caused by the
redemption OF the 1905 Is not less than
81, 00o, 0O0ig.s.1G = .a.--=r Cd
uItdOes not seem that there can be any
further; decline in the 1868, and az there
can scarcely DO any further decline IN the
$3.50, $50, 900 OF other Issues Of $40 bonds
now outstanding until the Remaining
1893 are redeemed, the $1,000, 900 oflloGs
above estimated iSpFobabiy all that will
be experienced forBomey eafa.i But when
the remaining S9A7,5l7,i50 Of 1899, OK
the mAjo1ity Of them, are called In, the
prospect OF some Of the other series Of
5:20s being also called would cause o
like decline in them. However remote
the probability Of this may seem, the de-
cline OF the 1905 has set the bankers 70
thinking, and In view Of these circum-
stances some have lately substituted the
new per cents fol, 5.20S deposited with
the Treasurer 10 secure circulation, and
have sold their 5.20s and even their 1SS1s.
The new 8 per cents cost about 90 in gold.
and the 10.40s about 9S in gold. In the
event OF gold some time declining TO par,
these bonds would rise 10 par, and, by an
advance Of per cent on the ono kind, and
per cent on the other, would partly
Offset the decline In the currency price, n
The decline which would take place in
the currency price Of bonds in conse.
quence of the decline, Of gold TO, par Is, o.
course, only nominal, but the fact that q
banker who buys bonds at a currency
price Of from 10 TO liz, and deposits
them to secure circulation Is obliged to
anticipate this decline, by depositing them
at par makes many Of them regard the
gradual extinguishment Of this premium
as q real loss, and this view Of the case
makes many OF the National bankS, in
cities where they can easily loan their
money at 10 per cent, claim that there d
, no profit In circulation. gu l'-
| There is one fact in connection with the
premium on bonds deposited to secure
circulation that Is worthy Of notice, and
that is, that as long US this premium is in
existence, the total capital Of tho bank
would bear larger percentage to its total
liabilities 10 its depOsitors than they would
10 the same mount Of deposits ifthe pre-
MUM was extinguished! u