The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1875-03-12

Secretary Bristsvv's Gail for Bonds.
The Secretary Of the Treasury has relieved
upon the business community for the last few
days by the formal issue of his call for the
thirty millions of bonds, with detailed
specification Of their classes and numbers.
They are all of the issue of 1862, and
about twenty-four millions are coupon bonds
and the remaining six millions or whereabouts
registered bonds. We explained on q recent
occasion that the registered bonds are held in
this country and that very large proportion
of the coupon bonds is held abroad. When
bonds which have been exported to Europe are
called in there is q liability that the gold paid
for them will be sent abroad, whereas the gold
paid Tor bonds in American hands is likely to
remain in the country, unless our imports of
merchandise should exceed our exports We
therefore hoped that the greater proportion of
the bonds called in for the sinking fund would
be registered bonds. But it seems that
the Secretary Of the Treasury has no dis
cretion as to the particular classes of bonds
which he shall first pay. The act of March
3, 1875, by which this call is authorized, pro-
vides that it snail be in accordance With a
section of the Revised Statutes, which directs
that bonds be called in the order Of their
number and issue. This is no doubt an
equitable law. Bonds of long date always
bear higher price in the market, and if the
government acts uniformly on the rule of re.
deeming them in the order of their issue the
reasonable expectations of purchasers cannot
be disappointed
The banks of the country have reason to
congratulate themselves that so small pro-
portion of registered bonds is called for.
The banks are the chief holders of this
kind Of bonds, and we suppose that the whole
amount pledged to secure their circulation is
of this form. They save the inconvenience Of
cutting of coupons IL TIE semi.annual pay
ment 81 interest, and if these pledged bonds
were called in the banks would be COM
PEELED to purchase an equal amount Of others
to replace them. The withdrawal of
SO large an amount as thirty millions tends to
enhance the price of bonds and the banks
would accordingly suffer loss if compelled
to make new purchases to secure part of
their circulation. They might be compelled
to pledge five per cent bonds instead of the
six per cent bonds withdrawn, in which case
there would be diminution of one per cent
on the profits OF their circulation, which would
increase the tendency developed within the
last few months to surrender their notes and
thereby contract the currency.
The six millions of gold to be paid for regis
tered bonds will be likely to stay in the coun-
try, easing the gold market and facilitating
the payment of duties by the importing mer-
chants How large proportion of the
twenty-four millions of gold paid for coupon
bonds will be exported cannot be predicted.
In the first instance the proceeds of the bonds
sent home from Europe for redemption will
be transmitted IN the form of bulls of exchange,
and the amount of gold exported will
depend on the price of foreign bills.
If the spring expectations of grain
and cotton should be large and the
spring importations of goods moderate q
comparatively small amount of gold will be
sent out of the country. Let this turn out as
it may. it will be an advantage to the Treas
ury to exchange thirty millions of dead gold,
which earns nothing, for bonds on which it
would otherwise have to pay six per cent in
terest. This operation is clear saving to the
Treasury, whether a considerable proportion
of the gold is exported or not AS regards
the immediate business of the country, half
or two-thirds of this gold might as we'll be in
Europe as to be locked up in the vaults of the
Treasury, where it is of no more use than if
it were still hidden in the mines. The buoy
ant tone which this important step will give
to business is legitimate, and we welcome
every event which tends to lift up the com
munity from depression and dependency and
set the wheels of enterprise again in motion.