New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1881-12-11
pEnEltpTLnN OF RONDS

Secretary FOlgef mas given lHStTuctloho
which are intended to prevent undue accumu-
lalion of money IN the Treasury during the
next four weeks, and to check stringency IN the
money market. Having already issued call for
$50. OOO, 900 of the three and a half per cents,
which will expire January %, the Secretary
now directs that any of these called bonds, to
the amount of $j,OO0,000 each Wednesday,
shall be redeemed on presentation with the
same interest that holders would get January
% if they should retain their bonds until
that time. The general policy of calling bonds
Of the extended classes has not seemed and
does not seem to us the wisest. But, since the
Secretary has preferred that course, it is fortu-
nate that be has taken the best means to bring
in the called bonds as soon as possible. In any
case. there will b. some difficulty in getting
the bonds before the date ut which interest
will cease, while some will remain outstanding
even after that date.
In Offering to pay interest to the maturity
of the call, the Treasury sacrifices not a cent
of money For $2O,OO0,000 in gold, now
lying in the Treasury, will draw no interest
there if it remains until the Cid Of January.
But the same sum which the Treasury will
pay, if the boEas are presented at once, it will
have 70 pay Mt the end of January or later.
Something il TO he gained, while absolutely
nothing can be lost by anticipating the IN
terest payment. The gain is in preventing an
undesirable accumulation of surplus revenue.
Secretary Folger in his very able and judi
cious report, recommended legislation for the
purpose of diminishing the revenue hereafter,
but no immediate change in the revenue laws
is expected. For some months to come,
the revenue under existing laws will
exceed the expenditures unless there
should be larger amounts taken from the
Treasury, for arrears of pensions or other pur-
noses. than are now expected to be pad. lt
has been shown already that this surplus will
not be as large, during the rest Of the fiscal
wear, ms many imagine, and it is by no means
the fact, as some sly, that tie Treasury is
taking in mGFe money than it pays out to the
extent of s., 900, 900 per week. But there viii
hereafter be some surplus to be expended, and
the state of the money market leads the Sec
rotary TO believe that it should be discussed in
December, as far as possible, rather than after
the new year has begun.
While it is the general opinion that SeCrc-
tary Folgcr deserves credit, and has done
what he could to make the call of bonds inn
mediatcly effective, there is much doubt
whether the bonds will come in very promptly.
Business men have learned, from experience
under other recent calls, that large
proportion of the extended bonds are held
in such a manner that they are not
readily exchanged for cash. Ont of
$lll,546,S 500 extended six per cents, reported
outstanding IN the debt statement of Decem-
Der |, it appears from the Controllers re-
mort that S36.O40, $50 were held by the banks
as security for circulation Some were also
held a, security for deposits 1t is quite prob
able that rs much as $S,000,000 OF the bonds
recently called may be held by the banks and
they may not Immediately see other bonds
which they wish to purchase. Until January
20 their called bonds will serve rs security for
| circulation, while their value in gold would
| not; and the banks may hope to be able to pur-
| chase other bonds at less cost by w&ting u
month or two.
Another and considerable part of the extend
ed skies is held by insurance and other COM
panies which are about to make annual state
ments. These companies cannot now buy bonds
at par, and therefore cannot reinvest at this
time without diminishing their apparent assets.
Very many bonds are also held, es-
pecially at this time in the year, by persons,
firms and companies, in order to avoid
taxation on unemployed capital, and such
holders will not be likely to forward their
bonds for redemption until after January L.
In other cases, trustees of estates, or persons
holding funds under orders of Courts, will take
time to determine what other securities to
purchase in place of the bonds called, and, rs
they cannot lend on call, will not be moved
to any haste by high rates Tor money in the
| Street.
| In view of all these circumstances, it will
not be surprising if comparatively few of the
called bonds come in this month. nor will it
be in any respect to the discredit of the Sec
rotary He might have made more prompt
| and sure disbursement Of the surplus in other