The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1881-01-06
Government Securities.

g
The following statement is from the Wash.
ington correspondent of the Baltimore Sun o.
December Goth:
Investors in United States bonds have come
to think it rather favor when the Secretary
OF the Treasury anticipates the payment of in
terest by few days without rebate. 1t is
scarcely known that by authority of Congress
conferred as far back as 1864, the Secretary OF
the Treasury is empowered, in his discretion,
to anticipate the payment of interest as much
as one year in advance without rebate. At the
time this authority was conferred United
States bonds were not so high in the money
markets of the world as they are now and Con
gress deemed it expedient to offer every induce
ment to tempt investors. Of course no such
necessity now exists, at time when the Uni
ted States can, without any difficulty float a
bond at par at rate of interest as low, if not
lower, than any country in the world, but the
authority to anticipate interest still remains
with the Secretary. The United States gov
eminent is now in position that it can obtain
an unlimited amount of money on its own
terms. Some doubts are expressed in financial
circles as to whether the proposed new three
per cent funding bonds can be placed at par,
but expert fnanciers have no doubts whatev-
er on the subject if the bonds are made to run
a sufficiently long period. British consols,
which are supposed to run Indefinitely, and
which bear three per cent interest, were SO at
the latest quotations, and United States three
per cent bond, to run not less than fifty years,
may be certainly anticipated to command par.
Evidences have, however, accumulated here
within the last few weeks of widespread OPP
position in our domestic money markets to
the placing ola government bond at less than
four per cent, as it is seen very plainly that a
permanent reduction Of the rate of interest on
government securities must inevitably tend to
reduce the rate of interest on money and COM
mercial transactions throughout the whole
country. The savings bank interest through
out the country is evincing, perhaps, the most
concern on this subject. The savings banks
generally pay an average interest to their de-
positors of four per cent. Next to real estate
investments the bulk of their deposits are now
held in United States securities, and if they
have to take three per cent on these, of which
there is little doubt, their depositors must be
content with the same rate, or the savings
banks must seek new channels into which to
put their immense accumulations, and in this
event probably run risks which it would be
better to avoid In the event of the passage of
new bill authorizing the issue of 8 per cents,
it is understood that the Secretary of the Treas
ury will stipulate that there shall be no author
ity for the quarterly payment of interest.
There are now about 81 400 100000 of 5, A
and 4 per cents of what are called the funding
loan on which the interest is paid quarterly.
This entails an immense additional labor and
expense on the Treasury Department, in fact
just double as when the interest was paid semi
annually, and it has not been ascertained that
it is any benefit or convenience of consequence
either to large or small holders of bonds.