New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1882-12-04

@snt can n' now T''' borrow money and n,t t9c e
banks and other holders of bonds is greater than
1t may be in the future. The nearer these two rates a
ernment to make profitable exchange. by ,rtnpi tnr'
er'naos esu on As .hs GSTeTnmeOs SS8f Invests m
surplus 4l2 per cent BY calling threes three aud
at and gig per cent BY buyng ioups
202 per cent one additional advantage OF this prop9sl
uOn is In the reduction Of the interest on the
public debt the uniform of per cent IT, by me
reduction OF taxes and customs, there should hereafter
be large dminuon Of the surplus revenue the surplus
revenue already received would as proposed ny tne
Controller have been invested to the very best adNa
Jhe interest being reduced to the uniform rate OF
per cent the whole debt would be in the best possible
cyrn uier any "S rcdncon L Of principal
were made. Another advantage is that ,,oa t
to uniform rate OF per cent the present hlsh prem,
um upon bonds would almost enurely dlsappeaT' ana
the demands Of business The temptation 10 sell such
bonds fOr the purpose OF realizing the premium
won no longer remain proposition for refundns all
the bonds MOI PAYABLE az the pleasure OF the Govern
mcnt iniO per cents suggested during the last
session of Congress. The proposition i tat nauce,
and 4l2 per cent bonds 10 surreIder theih 10
the Government receiving IN payment therefor three
per cent bonds having the sanc dae - maturity as to
bonds which are To be- surrendered lhe nc" tnreI IN i i
c Ht bonds issued would themselves Otir Hh
premium, and 1t is believed that the holders ol 4
pr ce rs would ut 10 exchange. II acc0mplhc y
an oler of not tnau Is per cent premium, Ine
47uOOOOO0O, outstanding At - per cent Tolld 'c
$lO0,OuO.OUO, ana this premium could be pdu, ~ Ie
bonds are surrendered exchange from the surplus
rev OF the Government thus in eject reducing to
dcb o. the Government @lO5,OOOOOO by prepay heht
or interest winch must be laid III u
greater rate 'ach year uniu maturity.
The benefits of this plan bOh 10 the holder ana 10 ue
Government, apparent, The holders wOud te che'
In the shape Of > per cent premium upon tbs pOA1r,
portion OF their interest in advance, whlch
would be available for loans at rates
Governments, Wihca IL less tuau per cent ne
Government would b. enabled by this use OF ls surplus,
to a purtiJn OF the interest which oJhcrWIss II
wOald be compelled to pay hereafter. The mdihct
piIca Oi ne cent twenty i've ear bonds II now
1920 wucu iudic.Ie market estimate OF borrow
ing rate OF Interest 294 per cent per Ahhuni
to the Government. n this rate the present
value OF l per cent Of Interest upOn
each 500 bond annually Tor twenty-five years rem
Qusned by the holder i5 iG70. II the holder acccps
3IJ equivalent Tor these tW entyNe ahhuii pay,
nlcuts instead Oi 1T1O-a reduction Oi %''O
frOm the market estimate OF the Val -
tho GOyerumenL VIII practically purchase nom Tue
hold of the bond alta y per cent rate of interest III
words the present value OF the twenty-five one
dollar annual payments, relnqaished by The hOl1er
when comp ted al tie rate OF 81 per cent per annun
cent is worth only Sl5, premium which, II l. pc
hcycd, the holders would be WliGus 10 accipii
ana II the GVyefnmen be aOe 20 nyc5, r. surplus rtN
HUc at rate - IA ortbe " sei rs 2 per cent teie
would he good reason fOr Congress 10 proNVc
the 4ary legislation for authorizing artdl -emeul
wIrh tlsO De to DC Of advantage 10 hoIdes
OF the per cent bonds.