Savannah morning news. [volume] (Savannah) 1868-1887, 1881-05-14
Conversion of the High Interest
Bonds,

Information from Washington is TO
the effect that the conversion of the 8
per cent. United States bonds with 81
per cents. at the option of the holders. is
progressing rapidly. Over one hundred
millions of these bonds have been already
Continued" under the Window plan.
leaving only about ninety millions more
to be sent in. When these are extended
all the per cents. will be disposed of,
except those issued to the Pacific roads
for the construction of their lines. This
will insure, on these bonds alone, q saving
of about 50, 900, 0O0pe annum in the way
of interest, and as the continued bonds
already command small premium it is
probable that all those yet outstanding
will be speedily likewise continued.
A contemporary who has given the
subject much thought and attention is
clearly of the opinion that the same
process which has worked so successful
ly with the IS can be applied with equal
success to the per cents. now redeem
able, and of which there are about $3.50.
900, 900 outstanding. It reasons that
1.-THE true policy for the Secretary of the
Treasury to pursue is to offer for sale
the $104, 900, 900 of unissued per cents,
which would mature in 1907. They
would bring a premium that would re-
duce the interest on the money received
below 81 per cent They would proba-
bly, sell for Is or 16 per cent premium.
With the proceeds of their sale the Sec
rotary could call in and pay off at least
$121, 000, 600 Of per cent bonds This
would abolish ST., 600, 900 of the princi-
pal of the debt and effect a saving of in
terest on the exchanged bonds Of over a
million dollars a year. The surplus
revenues of the government be.
tween now and next December,
when Congress meets, together with the
spare cash in the Treasury, will enable
the Secretary to call in and pay off at
least 800, 600, 900 of the per cents. Add
this to the amount which can be extin-
guished by the sale of the unissued long
As, and there will only remain about
$3.50, 900, 900 of the per cents. to be
taken care of, and there is no doubt that
the holders will consent to have the in
terest reduced to 3! per cent. for the
sake of an extension of the time they
may run. Let the Secretary offer the
same privilege that he has on the IS, and
then proceed to make frequent calls for
ten or twelve millions for redemption,
with the right of extension at 81 per cent,
and there is no question but as many
bonds will be offered for continuance as
the Secretary shall care to accept"
There seems to be scarcely doubt
that the Treasury can, either in this way
or 10y an extension of all the 5s and Is at
81 per cent, materially reduce the inter
est on the debt, which reduction would
then amount 20 about $4,000, 900 per
annum, and if the present prosperous
condition of the country continues and
the government can hold on to the heavy
receipts of the past years without in
creasing its expenditures. it is estimated
that the principal of the debt can readily
be reduced at the rate of 800, 600, 900 a
year. The total interest bearing debt is
Tow only 81 ,665, 749, $50, so that at that
rate, it would take very few years to
cancel it altogether, while, of course,
the burden of it would be very materially
reduced each year.
This is all very gratifying, and affords
food for very interesting reflection. If
Mr.. Window has been able, without the
sanction of Congress. and trusting only
to that body to give its consent to his
course, is so readily enabled to extend
the 6s-and perhaps can equally as
readily extend the 5S-at 81 per cent.
interest, and those extended bonds com
mand small premium which will re-
duce the interest to about 3 per cent
it proves two things very clearly: First,
that the Democrats of the last Congress
were correct when they maintained that
per cent. bond could be foated at
par; and second, that there was no JUST.
.ficstlon in Mr.. Hayes veto of the late
funding bill.