Grant County herald. [volume] (Lancaster, Wis.) 1850-1968, 1878-09-05
LANCASTER. WISCONSIN. tt URsDAY SEPTEMBER 1878

the coniden of the people in Ii,
governments.
"ln what proportion do you fins
the supposed rich, and the suppos-t
poor investors? Which class TAX,
! the most bonds 2"
"WelI. from my observations. j
judge that the greatest number O
investors is comprised in the class
who have bad their money IN bank
savings banks, especially. The nex,
largest number of bonds are taken
by insurance companies, who want Q
long time bond. Third, | would
name new banks that are being or.
ganized, who buy them for deposi,
to secure their circulation, and old
banks who have called bonds on
which interest has ceased, and which
they must replace. The next class
is composed Of private capitalists--
they are few, but when they buy
they take large amounts. OF course
the second, third and fourth class
have named have the largest amount
invested, but you will find By far
the largest amount of investors ia
the first class. / notice that the
mcst of the bonds called tor are eli
thor Of very small or very large de.
nominations. That indicates that
the people who buy four per cents
are either poor or else they are very
rich. The advantages offered by
these bonds are greater to the very
rich and the very poor man, than to
the middle classes"
"How do you explain that 2"
"Why,the middle class want bonds
that are easily converted. They
keep their money in motion. Thew
see way IN which they can make a
sum of money bring big yield for a
few weeks. They sell their bonds
and use it. When they have reaped
the profit they buy bonds again. But
the advantages of these bonds to tho
very poor or the very rich are:
l. The long time that they run.
2. Their small denominations.
3. They are free from taxation.
4. The interest is payable quar-
terly, and draft is sent to the post.
Office address of the owner, whereas.
in collecting interest on other bonds.
you have to go somewhere and be
Identified, or hire lawyer to get it
for you, which is great bother"
"What do the banks that order
large amounts Of these bonds do
with them?"
They pay them out TO their custom.
ers. Every bank, nowadays, has q
surplus available fund, and it is GET
ting to be the fashion for banks to
invest their surplus in these bonds.
so to be drawing interest upon it !;
and when q man comes in to make q
check, they say TO him "Don't you
want some part Of the amount 10
bonds ?" and the man about once out
of four or fivo times says Eyes," and
10 that way great many of Thorn
are disposed OF and get into circuIa-
ton. The bank makes its one.eighth
of one per cent. commission on the
sale. allowed it by the government,
and the man gets piece of money
that is worth more every day he
holds it. One bank in New York
keeps about half million of these
bonds in its vaults all the time and
has disposed of millions of them in
the way | have described"
"But do you think it is bene6tting
the country for people to lock their
money up 10 these bonds? Do you
think it is a good sign that people
are willing to invest their money at
4 per cent. interest, instead of put.
ting it into active business? 1t shows
great confidence in the government
no doubt, but does it show con.
tidence in the return Of prosperity
to the country ?"
"My dear sir the men who buy
these bonds are not those who would
inve't their money 10 business, in
manufacturing or in trade, even if
there were no bonds to buy. The
people who invest in 4 per cents. are
those who saye dollar q week, or
twenty dollars q month, and those
who have accumulated fortunes and
grown old, 80 old that they want to
be free from care, and are willing to
take 8 small rate of interest, paya>
BILE frequently in preference to hav-
ing to watch every dollar of it for
fear it will be stolen or burned up or
they will be swindled out of it in
some way. Tho insurance compan-
les and trust companies that buy
these bonds are those who will not
put their money in anything that
has fiuctuating value. For such in-
yes ors there must re some such Sc
curity as this"
But men who are willing to let
their money to the government at 4
per cent cannot have great amount
of confidence in private enterprises ?
"That, of course is so. The great
inducement to buy government
bond is because 1t is safe and we
are now living at a time when trade
and commerce and enterprises of all
kinds have touched bottom. The
men who want to borrow and who
are willing to pay high rates ofin-
tercst are risks. They want to bor-
row either to speculate with or to
pay Others for what they have loan
ed them. You make great mistake
too, if you are under the impression
that every per cent. bond sold in
creases the amount of money invest
ed 10 the government securities. In
fact, the contrary is the case. We
put out 4 per cent. bonds and call in
the same amount of 5 per oent.bonds
Four par cents are worth par, while
the six per cent five-twenties we are
calling in represent more than dol
lar to the holder. The government
does not now (and will not unless
some disaster visits IT'D issue bonds OF
an aggregate face value greater than
those now outstanding. In fact it is
decreasing the face value every
month. There is not so much mon.
ey invested in government bonds 90
day as there was q year ago by near
ly $40. 100000, and l believe Secro-