New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1881-11-25

any emergency should arise, rendering 1t ne
ccssary 70 dsburse considerable sum without
delay. Some remedy the Treasury is forced 10
seek 1t has the choice of three: ~ 1t can pay
higher price for three and half per cents;
or (2) it can call a large amount OF three ana
half per cents, trusting that the early de-
livery of one-third or half of the amount Will
afford an outlet for money to the extent de-
sired or (3) it can invite proposals to sell
four and half and four per cent bonds.
I. If the Treasury is willing to pay more than
mar and interest for three and a half per
cents. its most economical course is to invite
proposals to sell bonds of several classes.
Parties having three and half per cents to sell
will then be placed in competition with Others
having four or four and half per cents 10
sell. and more favorable offers are likely to be
made than if either class were exclusively IN
vited. But the wisdom of paying more than
par and accrued interest for bonds which can
Inc redeemed with little delay at that price
will be seriously questioned. Many will hold
that nothing less than an extreme emergency
can Justify that course.
II. Experience has proved that the plan of call
ing the three and half per cents is extremely
Instantaneous to the Government 1t in
wolves more uncertainty as to the amount OF
disbursement which can be made within
given time, and more disturbance of the cur
rency and banking system than any other
method. If the Government needs to disbursc
SlO.OOOOOO now, it is compelled to call
in bonds amounting to $20,000,000 or
$3.50. 600 OOO in order to have reasonable
prospect that bonds for $l0,000,O00 will be
speedily presented. Even then, there is a
chance that bonds to that amount may not be
brought in, aud yet the Government Is
obliged to he ready to take two or three times
the amount, now, or at the expiration OF the CALL
This course, too, compels the Government TO
lock up considerable amount of money at
| some time prior to the maturity of the call,
in excess of the amount which the Secretary
would otherwise deem it necessary to hold.
| III. The Treasury can undoubtedly purchase
bonds of either class mt some price. by lnvlt-
| ing offers to sell bonds of three different
classes, the Secretary viii doubtless obtain
| better offers as to either than hc could obtain
| if the invitation were limited to that class
| In Judging of the various offers that may then
be made, the Secretary is justified in remem-
bcring the important incidental advantages
which are TO be gained by retiring bonds
PAYABLE mt a fixed date far in the future, and
not redeemable until that datceXcept by consent
of the creditors. The three and a half per cents
can always be redeemed at par after short notice
But ut the present rate of debt-paying, If these
bonds should be paid first, they would soon
be cleared away entirely. There would remain
in that case, a period Of several years prior to
the maturity of the four and a half per cents, and
| afterward period of sixteen years before the
four per cents could be paid During all these
years if the Government wishes 10 reduce ITS
debt at all, it will be compelled to buy four and
a half or four per cent bonds in open market
and 10 pay Just what the holders may
then demand for them, in view OF the fact
that no other United States bonds will then be
lett outstanding Hence, if the three and n
half per cents should be redeemed first, the
| Government would then be, to "a certain eX-
tent, at the mercy Of It's creditors, and would
be compelled to abandon the policy OF debt
reduction for years, or to pay much more Tor
bonds than it would now be obliged to pay.
If the Secretary sees fit 10 invite proposals
TO sell bonds of either class, he will not need,
nor will he probably find it expcdient, to an
nounce in advance the prices at which either
will be preferred. Having offers before him.
he can accept those which appear most adVan-
| tageous to the Government, all things con-
sidered.