The Hickman courier. [volume] (Hickman, Ky.) 1859-current, 1899-12-08
BOND MANIPULATION.
How the Administration SHAPES
Thing. ~ Help Oat spess-
Iators.


Fer the first time In ten years the gov.
eminent Is about 10 reduce its bonded
debt. That is gratifying, OF course, but
the circumstances under which the
operation is 10 be performed do not
speak very forcibly for the intelligence
of our financial policy, however elo-
quently they may tell of the astutensss
of the individuals who profit by IT,
The secretary OF the treasury has Of
fered TO buy bonds TO the amount OF
S25,O0o,000 10 ease the money market,
lie proposes to pay iist. for four per
cents of 1907, or III for five per cents. OF
1904. That would release from S27, $780,.
900 TO S2s,is7.500, II the bondholders
should avail themselves Of the offer to
its fullest extent,
Looking at the matter merely with
reference 20 the present point OF time.
the secretary's proposition is advan-
tageous to the government. The money
Is lying idle In the treasury, and by
using IL In this way We shall save about
81 900 900 year in interest
But how does that money happen to
be in the treasury. II is there becaure
this administration and it's predecessors
issued bonds for Il. The four per cents
! for which Secretary Gage is now offer
ing il21. were originally issued at par.
That is 10 say. the government proposes
20 pay back - .1as. $50 for every 81 ,0oo,-
coo IL received. after having already paid
$3.50, 900 In interest,
On some OF the other loans the show
| ing il even worse. -Four years ago Pres
ident Cleveland sold SOC 1874 400 Of four
per cents. of 1925 Ia the Morcan-Bel.
mont syndicate at a fraction over lOi
III the government should try Ia buy
| back any OF those bonds to-day IL would
! have to pay 1901. IL is not enough for
| the government 90 buy or sell bonds
| whenever IL suits the convenience Of Mr.
| Morgan and the interests he represents
lit must also buy dear and sell cheap
Suppose instead of this clumsy bond
arrangement we had postal savings
bank with 81 600, 100000 Of deposits
| Then, IL the government had more
| money on hand than IL needed, and
wanted 10 get some OF IL into circula'
| ton, all IL would have To DO would he 10
reduce the rate Of interest. As the in
| tcrcst went down the deposits would
/ flow out. When the process had gone OF
long enough "a could be checked by sim.
| ply fixing the rate OF Interest at the
point at which deposits cqualed with.
drawals.
Or suppose we had the interconvcrt.
| ible bond system. There would be nc
| premiums then and no losses 10 the gov
eminent on purchases and sales of
bonds. when money became go scarce
that IL was worth morc than the two
per cent. paid by the government the
holders OF bonds would simply take
them to the treasury and receive notcs
| -. 49,. Nvi..,..s.at-S l.-..i "a further uEs
for the notes they would take then. &C
the treasury and get bonds. Thus the
money market would always be easy
and the government would never bs
forced to chatter for It's own securities
The Sl.o46,Ois,s $50 OF bonds we had
outstanding when Secretary Gage mad,
his offer cost US S40,317 .s76.sO year IN
interest. Under the other arrangement
the annual interest charge would IL
less than S2l .O0O, 900 Mt the outside. and
might run down 20 nothing, " the De.
mand for currency were sufficient.
What docs the democratic party think
of currency reform as one Of the issues
OF next years campaign ?-N. V. Jour.
nal.