The times., 1899-10-11
THE GOVERNMENTS PLAN
Thirty Million Dollars of Interest
Will Be Anticipated.
Holders of Bonds May Secure in Adj
vance All Payments Due. Until the
End of the Fiscal i ear--k Discount
of Two-Tenths Per Gent to be Ex-
acted-Scheme Meets With Favor.


The important step decided on by the
Treasury Department yesterday with re-
gard to the anticipation of the payments
of interest on the Government bonds was
the subject of much comment in financial
circles in New York and elsewhere. The
opinions expressed were generally favora-
Bile, their tenor being that this releasing
of $50, 900 600, more or less, comes at
most opportune time, when it is much
needed and will do much good to the fnan-
cial situation.
The plan of the Government in brief
is that the interest to become due on
bonds on November 1 shall be paid inn
mediately, and that holders Of bonds on
which interest will be due between now
and the end of the fiscal year. June 80
next, may obtain their interest imme-
diately, if they wish, by accepting a dis
count of two-tenths of ] per cent for each
month that the interest is anticipated.
The circular issued by the Treasury De-
partment is as follows:
The Treasury Department has decided to
anticipate the interest for the entire fiscal
year, the period ending with July l, 1900
The interest due November l will be paid
in full without discount, but if holders OF
bonds wish to take advantage of the offer
to anticipate interest due at subsequent
dates, a discount at the rate of 2-10 of l
per cent month will be exacted.
The amount of interest due from now un-
til the end of the fiscal year is about $780,
000,0 000 The prepayment of this amount
should be relief of much importance to
the present stringent money situation;
while, on the other hand, the discount will
be a saving of large amount TO the Gov
ernment. The Treasury is in position to
advance these interest payments withou;
the least embarrassment.
The interest due November / is made up
of the per cent loan of 1898, the SIS of
1904, and the As of 1925. There is 81, ,600,-
$50 coupon interest which will be payable
at all subtreasuries October 13. The books
for the registered bonds of 1904 and 1925
do not close until the 18th. The checks
for the interest on those registered bonds
will De mailed October %, and the checks
for the interest on the registered 3's will
be mailed October %. The, total prepay
ment of November interest is 81, 363, ,244.
MIR. vanderIip's Opinion.
Assistant Secretary Vanderlip made the
following statement regarding the pre-
payments yesterday afternoon, and it may
be regarded as stating the opinion of the
department in the matter:
THE Treasury is in position to under
take readily the payment of all the inter
est due during the fiscal year, large as is
the amount. The cash balance is an ex-
traordinarily large one, being now nearly
S290,000,o00. 1t was larger than this
year ago. but we were then just receiving
the payments for the s200, ,000,6 900 war loan.
Our cash balance now however, is far lar
ger than it has averaged for many years
and if receipts continue TO hear anything
like so favorable relation TO expenditures
as they have recently, it promises to be
still larger instead of being reduced.
tThe total amount of interest due be-
tween now and July l, is s25, ,S96, ,535. II
the holders of all the bonds should this
month take advantage of the offer for the
prepayment of interest it would be a saw
ing to the Government OF the rebate which
would be demanded The several classes
of United States bonds are now selling in
the market on a basis of about 2 4-10 per
cent per annum and the rebate which the
Government asks-tWo- tenths of ] per cent
a months at that same rate. If the de-
mand for money is as urgent as it is in
some quarters represented to be, ii would
seem as if holders ought to be glad to an
ticipate the fiscal years interest when the
discount is so small, and that the situation
ought to be TO a great extent, relieved by
this action.
Il see no reason why this prepayment
of interest should not meet with approval
from every quarter. From the Govern
ments point of view, it is certainly adj
vantageous in view of the extraordinary
cash balance the Government has lying
idle in its vaults, and of the saving which
the discount viii make; while on the 9th
er hand it offers to the money markets
over $25. 100000 which can be obtained with
the slight sacrifice Of a discount at the
rate of two-tenths of / per cent a month;
which, in view of the 30 and 40 per cent
quotations, that have been made for call
money in New York, should look most
reasonable.
Details of the Plan.
The third official utterance of the de-
partment on the subject during the day
was the following circular to bond holders
giving details of the proposed prepay
ments:
Owners of registered bonds desiring
prepayment must present their bonds to
the Treasurer or some assistant treas
urer of the United States, who will stamp
upon the face of the bonds the fact of such
prepayment, and return them to the own
ers, with the interest for the periods above
mentioned, less the rebate. National banks
owning bonds deposited with the Treasurer
| of the United States to secure circulation
| or deposits may obtain prepayment upon
| application to the Treasurer of the United
/ States. The bonds so held, upon which
| interest is prepaid will be slammed as
| above indicated.
Coupons maturing upon the dates in
| cluded in this circular may be presented
| for prepayment at the Office of the Treas
! urer OF the United States or any assistant
! treasurer. 3
In calculating the amount Of rebate to
| be allowed, any fractional part of month
! will be reckoned as a full month, and the
/ rebate for such fractional part of a month
! calculated as a full month will be retained
| by the United States, except that no rebate
/ Will be charged for the month of October,
| 1899. an
Prepayment under this circular will be-
| gin Monday, October 16 1899, and continue
until December 81, 1899
The interest due November l. 1899 on
registered bonds will be paid as soon as
/ the checks can be prepared. They will be
mailed to the payees on or about the 25th
! instant
Effect on the Market.
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