The News-Herald. [volume] (Hillsboro, Highland Co., Ohio) 1886-1973, 1888-05-10
THE BOND BIDS.

The Administration Going Back on the
Proposition t. Reduce tho Surplus by
+. Purchasing Outstanding Bonds.
! It is quite evident that the Administra-
tion does not desire to employ any consider
able part Of the surplus for the purchase Of
bonds. Having backed down from its for
mer position that the purchase of bonds not
due was not authorized by law, bids fQ the
sale of bonds to the Government were in
vited, received and opened. The offerings
aggregated cess, 900 Of 4 per cents and ST.
1S9,6OO of AZ per cents The market price
Of the per cents is 124.75, and they were
offered to the Government at 124.T0 to
125.75. The Secretary Of the Treasury &c
cepted eS5, 900 offered at 125 or less, and re-
iected the remainder. The market price OF
the 4le per cents is 1903. .3712, and the amount
named above was offered at 10T1o to los. 1212.
All the bids for these bonds were rejected.
It Ii q wcll-established principle of trade,
says the Cleveland Leader, that whoever Is
forced to sell must expect to get some thing
less than the real value of his goods. The
corollory Of this is that whoever is greatly
in need to buy what holders are not anx-
ious to sell must expect to pay little moro
than the current rate. That is the situation
of the Federal Treasury. 1t has an enor-
nous surplus, and is impelled by the exi-
gencies Of the situation and the demands OF
public sentiment to employ part of this
money in purchasing bonds not due. The
Secretary had no right to expect under the
circumstances that there would be any con-
siderable offerings at the lowest market
rates, and it was his duty to accept oil that
only slightly exceeded such rates. The ex-
cess asked above the market price in this
case was only about s11, 900 on the whole
amount offered, 81, So, GOO.
That it was to the inte rest Of the Govern
ment to accept all the bonds offered can
easily be shown. Tic per cent. bonds
have nineteen years TO run. Each $1,000
Of these bonds will cost the Government
SLIGO in principal and interest if allowed
to run until maturity. They were offered
to the extent of s635,Go0 at an average Of
s1,255 for each s1,0o0 By accepting them
the Government could have saved S505 on
each 81 900 offered, or s320,Gi5 on the whole
amount, for it receives no interest on tho
surplus accumulations. Figuring from this
time, these $685., 600 of 4 per cents will have
cost the Government 81, 000 at maturity
It could buy them now for t706, ,925. Their
market price in New York recently was
$780, 2163, difference or excess in favor Of
the bidders, Of "a, 7G3.
The ~ per cents have three years to
run. Each 1900 will have cost the Gov
ernment s1,135 at maturity, figuring from
this time. They were offered at an average
of s1,O77.5O Tho Government could have
saved $3.50 on each $1,000 bond, or o total
Of SOS, ,402 on the whole amount offered. Their
market price recently was s1,073.75 The
Secretary rejected every one of these bonds
offered.
The holders of bonds have learned that
the Administration is not any more anxious
to buy than they are to sell, and they will
probably make few offers in the future un-
less there is stringency in the money mar
ket. The Administration will then say to
Congress that it is unable to buy bonds at
fair price, and that the. protective tariff must
he Cllt down. 70