Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1899-10-12
THE GOVERNMENTS OFFER.
Prepayment of Interest in order t,
Relieve Monetary Strineency.

NeNeve Monetary Str1ngency.
| Washington, Oct. 1.-THE action of
the treasury department in anticipating
the November interest and offering to
discount the interest for the fiscal year,
as reported in these dispatches yester-
day was taken to help relieve the mone-
tafy stringency in the financial centers
of the country. The October interest
was anticipated for the same reason,
but the gain to the country was only q
! few days, and it had little perceptible
effect
If the entire s26.0O000O could be forced
out of the treasury and into the chan
nes of trade it would tend to make
money easier, but treasury officials are
not sanguine of success. If the govern
ment is to make s250,000 by the opera
ton, 1T follows that the bondholders
must lose that amount. 1t is reasona-
BILE to think those holders will not sub
init to a loss unless they see chance
of reinvesting their money in such a
manner as to make profit in other di-
rections. Many of the bonds are held
| by private individuals and in trust
funds. These may not find it easy to
lreinyest to advantage.
The national banks, of course, have
an enormous holding of bonds to secure
their circulation, and they are likely to
accept the governments offer, for many
| of them have loaned practically to the
! legal limit. and they can make use of
more cash. This is particularly true of
! the institutions in the big financial CEN
tiers like New York and Chicago. 1t is
probable the banks could take SIS. 900, coo
to $4,000, 900 out of the treasury through
the governments proposition with profit
! TO themselves and benefit to all con-
cerned.
Secretary Vanderbilt, in speaking of
the offer OF the treasury department,
said:
The treasury is in a position to un-
ldertake very readily the prepayment of
/ all interest due during this fiscal year,
large as is that amount. The cash ball
Iance is an extraordinarily large one, be-
ing now nearly $4,000, GEO. 1t
was larger than this a year
ago, but we We're then just
receiving the payments for the $200,ooo.-
600 war loan. Our cash balance now,
i however, is far larger than 1t has aver
aged for many years. and if receipts
continue to bear anything like 50 favor
able q relation to expenditures as they
have recently it promises 10 be still
larger instead of being reduced
The total amount OF interest due be-
tween now and July l is s25.s9s.535. If
the holders OF all the bonds should this
month take advantage of the offer for
| the prepayment of interest it would be
a saving to the government of s24947S
in the rebate which would be demanded,
ola of NIT I
bonds are now selling in the market on
la basis of about . 4-10 per cent per an
mum. and the rebate which the govern
ment asks-2-10 of per cent month
is at that same rate. If the demand for
money is as urgent as it is in some
quarters represented to be, it would
anticipate the fiscal years interest
when the discount is SO small, and that
/ the situation ought to be to great ex-
tent relieved by this action.
II see no reason why this prepayment
of interest should not meet with ap-
4 prevail from every quarter From the
4 the governments point of view it is GER
ttainly advantageous in view of the ex-
y traordinary cash balance the govern
ment has lying idle in its vaults and OF
4 the Saving WHlcH tHe discount VII
make. while on the other hand it offers
4 to the money markets over s25,o0o.0oo
which can be obtained with the slight
sacrifice Of discount at the rate of
wo-tenths of ! per cent month. which
4 in v!ew of the 80 and 10 per cent quo
tations that have been made for call
money in New York should look most
4 reasonable
4 The interest due Nov. is made UP Of
1.-THE 9 per cert loan of 1898, the IS Of lsD4
ana the As Of 1925. There is sl60o.Qoo
coupon interest which will be payable
iat all sab-treasuries on Oct. 10. The
books for the registered bonds of 1904
rand 1924 do not close until the 10Th. The
checks for the interest on the registered
IS Will be mailed on Oct. %. The total
4 pre- payment of November interest will
/ be 81, 1863. 244