Evening star. [volume] (Washington, D.C.) 1854-1972, 1901-01-01
OVER TEN MILLIONS SAVED
ANTICIPATION OF INTEREST ON GOV
EMINENT BONDS.
Assistant Secretary vanderIip Speaks
of the Success of Refund
Ing Operations.

Refunding operations under the financial
act of March IL last closed yesterday. the
books OF the department having been open
to the exchange of bonds for a period of
nine and half months. In discussing the
subject Assistant Secretary Vanderlip said:
The refundins has been successful from
every standpoint. Holders of the old bonds
Us, As and SIS of 1908. 1907 and 1904 re-
spectively, have voluntarily offered for ex-
change into rs, approximately S439 900 no0
out of $3.50 100000, leaving outstanding Of
this part of the interest bearing public debt
less than one-half the amount subject TO
the law. Exact figures will not be known
for several days. some of the bonds are
still in transit.
THE net saving to the government of
interest by these transactions is substan-
tally $40, 100000 This saving has been ac-
compiished by the payment now Of the
sum OF S422p.ooo which is really an
ticipation of SJ2,9oO0t0 interest which
would have had 10 be paid within the next
eight years. in case the old bonds were per
mitted to run to maturity. The difference
Is the net saving.
The 4 per cents of 1907 have been ex
changed in greater amount than any other
class. their total up to and including De-
cember % being 81 4 100000. OF the 3 per
cents of 1908. S96.G00ooD were EXCHANGED
and of the ) per cents Of 1904, $40 800 600
The Secretary Of The Treasury still has
authority. under the law to resume refund.
ing should he deem ii proper TO dc so.
whether or not refunding will be resumed
depends largely upon whether the interests
OF the treasury seem to require II at any
time in the future.
The pubic debt is now in far better con-
dltlon Tor retirement than ever before. 1t
may well be doubted whether the treasury
within the next eight years, during which
the bonds subject to refundment were to
mature, could have discharged that total
Indebtedness $50 ba
sinking fund requirements are substantially
SoO,OOo.Oo0 year, and the retirement of the
public debt can be more easily accom-
plished at the rate of $50 900 600 for each
of the next eight years than if the Score
tary of the Treasury had been confronted
with the problem of disposing of an average
Of S10O, 100000 a year.
The success of the operation Is due
mainly to two causes, one being a we'll
fortified treasury, and therefore magnifi-
cent public credit: the other and less sentf-
mental reason being the greater advantage
winch the new per cent consols offer to
national banks as basis for the security
of circulating notes. The banks of the
country have exchanged S26l 100000 of the
old bonds for the new ones. while indi-
vjdual holders have exchanged SI6S I'll 600
THE department has taken pains to con-
duct the refuuding operations promptly,
and no delays have been encountered by
those presenting bonds for exchange
Checks have been forwarded daily for
premiums paid. Notwithstanding the mag
nitude of the transaction, it has been con-
Quoted absolutely without friction of any
kind.
There is another feature OF the opera
tions of the financial act which merits at
tention, and that is the effect of the law
upon national banks. From March Il to
date 395 new banks have been organized
of which $50 we're with capital stock less
than $4,000. and IL, with capital stock
over that amount. The aggregate capital
of the former class was S7,3I20o0 and of
the latter Sl2,65oCtN. a total addition to
banking capital of 200220o9
Bank note circulation in the meantime
has Increased by the sum of $50 29S 900.
THE department is gratifed to note that
the principal increase in the smaller class Is
throughout the western and southwestern
states, sections which heretofore Were I'M
able to accept the benefits of the national
bank act, owing to its illiberal provisions"