The Dallas daily herald. [volume] (Dallas, Tex.) 1873-1887, 1882-09-29
FINANCIAL AND COTTON

cgrr,ea Times The call for SIS Gee coo of con.
,inr.1 S per cent bonds, issued last SATURDAY.
"a maturing on the Esd Of December. will prob.
~, I'd al rest the rumots that have been put
sasssai from time 10 time to the effect that The
ss.srstary Of the treasury would enter the mar
~. a. d purchaser of Z and a., per cents This
N which j. the first one that has been made
~, continued :. recognizes their substantial
iiso-iy with the original . s, since IL gives three
MATHIS notice O, the redemption OF tho bonds.
Tssrs was room for Il question whether the
t9lsrs iu accepting tha lower rate of interest
m no. waive their right under the original act
!, tb-ae months notice This call settles Inc
Sse,lou officially, and all future calls viii give
his notice
.,',--e ui ,onr embarrassment To the depart.
,snt 10 is desired to pay out the surplus reVe-
M for bonds with as much regularity rs posi-
iis soaAu0t 20 produce striugenCy at Que time by
,se1nulatinC an unusual surplus In the treasury,
mi An artificial ease at another time by making
syir.ordmary payments nom the treasury. The
oSiy way out OF the difficulty is 10 make calls in
nbclpauOo Of sufficient revenue, which, Of
selrse. involves some risk, and then prepay the
ssNod bonds with or without rebate Of interest
m fasr the surplus uCcumulatcs more rapidly
Kan Is deemed desirable, This may be &c.
'sp,rd as the settled policy SO long as any 3 or
u Der cents remain outstanding and uncalled.
me fact that the first call for tbiS class of boEds
/, for so large an amount isa sufficiently plain
Indication that prepayment is contemplated
Washington correspondent referring 10 the
rgmorS OF intended purchases in open market
avs that Secretary FOlger told him q few days
sgo that ever since heentered office, lastNoyem.
l9r. The had tried his best to invent some plan
whereby he could buy IS and iis's in open
market SO that the government could control
h debt az once and pay It's surplus at will
lOwad the eXliuculShmeut thereof Ills
incentive faculty had not proved equal to the
.s1 t.,t tf.tr rtlt M 10 not
how government can buy its own bonds below
heir market value, and that value is so high
hat the government would lose money by pay
Inv ilinSiead broadening bonds already by law
a. par The secretary couldn't approach the
market without having IL advanced upon him.
FOr that reason, and because II would be diff.
mil to convince OachWOOds people that II was
good policy % pay 30 per cent. premium" Tor
some h1niS when others could be redeemed AT
pgr he had kept out Of the market
Now, as regards present values, il is simply
an sdthmeiiual question whether IL viii pay
better to redeem 3 per cent. bond at par or
tlyS per cent BOND mt premium Of ~ per
tent The thing oiwhich 10 might be difficult 20
convince "bNekwG0ds people and some other
people, is that il would be money IN The
pocket o. the government To pay 20 per cent.
premium now, mourning prescat loss, rather
than wait from three to five years, until after The
bonds subject To call have all been redeemed
and then pay perhaps 20 or 40 per cent pre-
MUM The government would then DO forced
pbFat the market price, or go ON piliug up
surplus, OF reduce taxes to Il scale Incompatible
with the interests Of protected monopolstS
That's, holders Of bonds would have the gov
ernment in corner, and might be disposed TO
squeeze The difficult thing would be to con.
vince "backw0Ods' and other people OF the wis
dom ofincurring present loss In order to avoid
apostolic future squeeze, Secretary FOlger has
chosen not to grapple with this difficulty.
wisely perhaps, since "haCAwOods' folk may
even be willing to forego the pleasure OF paving
taxes 10 some limited extent by and by, if II
should become necessary in order to help the
government out OF Il corner. and deliver the see.
Fhry Of the treasury from the disagTccable
dlyoi paying 80 or 10 per cent premium for
hnn1g