New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1896-01-27
HOW TO BID FOR THE BONDS.
EXPLICIT INSTRUCTIONS FOR INTEND
ING INVESTORS.

EXPLICIT INSTRUCTIONS FOR INTEND
ING INVESTORS
EHE PURCHASER MUST CALCULATE UPON PRO
|, yIDING SINKING FUND FOR THE RE
DEMPTIoN OF THE PREMIUM-soME
TABLES AND FORMULAE.
The most popular loan ever negotiated py 'he
Government of the United States was that based
upon the 80 of 1865 1t was just at the ciose
Of the war and millions needed to pay on the
soldiers and meet other maturing obligations
Secretary McCulloch offered three-year ho'es
bearing interest at the rate of 3-lo per cent anu
in a little three months the people hao SUD
scribed for $3.50 10000 of them Why were they
ponular? Simply because everybody and anybody
could calculate the interest. Seven ana three-
tenths per cent interest on $50 amounts 10 % %
vcar or one cent a day. and the notes OF TINS de-
nomination bore at the top the legend: interest,"
one cent per day" In like manner the slw notes
had at the top: Interest two cents per day Inc
interest was paid semi-annualy, and to the soo
note five coupons worth slS2a each were attacheu'
the sixth sem-annual payment OF interest oe'he
made at the maturity of the note. the notes OF
bonds were sold at par. and every one knew no"
much interest was obtained and what HUG was
worth at any given time. -
suca, 10 not the case when low-rate bond is sold
Mt a premium A bond of the latter ciass can
never be popular in the true sense OF the worn, pe
cause very few, outside OF the great oa"N'''e
houses great insurance companies ana investors
Of large means know how much premium 10 pay
% realize any certain rate of interest Grand TINS
"a even more important-what to do with the inter-
est when they get it, The treasury Depai'"'e'
itself recognizes the fact that people IN genera 10
not know how much TO bid. and to oDViate 'he
,dniculty has issued a circular which gives 'he
prices that must be paid for per cent pono run
ming twenty-ninc years in order TO realize various
rates of interest. The circular does not however
tell the investor how he can realize 'ie i"'eie''
stated That The Tribune proposes to DO. Dut' De-
fore doing so, it is necessary to call at'ehoh u
other facts concerning the present bona issue
| CONDITIONS OF THE SUBSCRIPTION.
The first circular issued by Secretary Carlisle
3nv,t,ng sealed proposals for the per cent pohus
istated:
! Tho, bids will be received at the Treasury De-
nar.u.nt at Washington until noon. Wednesday
February 8. ,oos
2 That the bonds will be dated FEBRUARY l. 1872
end mature in thirty years, that u.s. FEBRUARY 49,
hut that all coupons maturing on anu ai'ei ~
r>ary /, 1896 will be detached lh's "'ea"' ''"'
.be bonds will have but twenty nine years 10 run
: q The bonds must be paid for In eoo coii' VI
rold certificates. AS the object In SELLING INC ~
IS to repenish depleted gold reserve 'he ii'e"u
ing investor should endeavor to obtain the heces
sarv gold from a bank or broker You cah'io'
help the Government by taking its god 10 ou' It's
bonds. ...u uo,
l. All interest accruing on the bonos ai'e, To-
ruary l. UP to the time of payment lor 'he oo"u'
must be reimbursed to the Treasury py 'he pu'
chaser For example: Suppose that you nave
- q, ,aa % n per cent rate for $1,000 bond, ana
that ON February 10 you pay the first ins'ai'e"' VI
% per cent You will then have TO pay no' o''is
sasS g. which is 20 per cent on sl'lsS q, out "9u
which is ten days interest on the oohu' ~ YOU
avail yourself of the easiest terms ana pay ~ pc,
can't fifteen DAYS afterward. the payment VIII.
oun+ IN 500 Ga OF which sl9 80 Is 10 per cent Oh
]he amount bid and 81 80 is interest at per cent io
Afteen DAYS on the remaining $500 OF the lace 'aue
of the bond If the third payment Oh ~ pei .ea' .
.laved for fifteen days. 1t Will amount 10 'i' do
before, plus 81 15 which is hiteeh Jay "'e..es "a
17oo the remaining part Of the bond Inc next pay
,nent would be slls 80 plus 9S cents. interest on VOW
Ana so on until the bond is paid for In TINS me'hoo
M having the investor does not lose inc 'h.e'e "
maid as he is recouped by the interest paio Oh inc
sends He does lose. however. the interest on 'he
hnterest paid in advance but to counter-oa'anee
Wi. Ia has a prolonged use OF his capital. Inc
t.overnment suffers in that 1t does not gam 'hhe
Niate possession Of the money
The bonds may be paid for in instruments as
Follows: Twenty per cent ana accrueo i"'e''''
when the bid is accepted, and ~ per cent anu a.
Sr,ed interest at the end Of each fifteen days there
otter Accepted bidders who pay all at once get
all the bonds the time of payment; 'hose who pay
in instruments get proportionate amount vi oo'u'
G. Payment for the bonds may De maoe q, ."e
Urea Washington OF dt tic t"i'NN
<,ub-Treasuries at New-York, BOSTON, rhau-
mia Baltimore Cincinnati, Chicago. St LOUIS ana
Rtew-Orleans The private investor VIII pe7'
.ccomn,ish his purpose by communicating win the
.,roner authorities through his bank, put such pro-
cedure is not absolutely necessary
, The investor should distinctly state wnetner
No wishes go 800 or 81 600 bonds and wnether ne
-v,shes coupon or registered bonds ANY person
ubscribng for 81 900 or will act wisely IN TAXING
80 coupon bonds , A.,
The Government will be ready to deliver 'he
bonds on February 10.
HOW MUCH TO BID
-,bere now remains the question now much u o'u
FOR the bonds and this together with o'her i'"toi
.art details Is given in the following table whlch
a. hased unon a 800 bond. To make calcuatloh
for q $50 bond divide by q for sl"O poho nu''pi!
nv N The first column gives the rates OF interest
10 be realized ranging from per cent 10 pei IN
The second column gives the correspond "e p''e
that must be paid to realize the various 'a'e' Va
1rterest The third gives the interest paid an
pualy IL will be noticed that II Is always 81 vi
each 500 bond no what is PAID lot the po''
Tho fourth column gives :he apparent rate VI III
,.rest that Is to say II to be the rate II the
annual interest paid is divided by the capitaI IN
x,estcd Column fifth is the most important OF all
&c n tells how much must be annually inves'ea III
order to redeem the premium paid. and to enable
the investor actually TO realize the quoted rate OF
interest: 800.
Prices on February !. of United States per cent
bonds running twenty-nine years co''eSpo'
10 various rates of interest