New-York tribune., 1901-02-08
ROND REFUNDING.

At the close OF January operations In "onne'-
tion with the refunding of higher rate bonds
into per cent consols We're practically ended
and since that time opponents of the Admins
tration have felt called upon To- express some
unravorable criticism Even the most hostile
however. have found II difficult 10 attack Sec
retarv Gage or the law authorizing his action,
while much lamentable ignorance has been dis
played regarding the Treasury and It's CON
dItion Briefly stated. there were outstanding
when the new law was enacted S343WOOO OF
4 per cent bonds. redeemable July !. 1901
This issue was originally for S140,92O.45O. but
about 5000 100000 worth were purchased by
Secretary WINDOW II was obvious At the out
set that the sinking fund would not be in posi-
ton 10 take up the issues coming due within
the next eight years, SO that the loans must be
extended II was wisely considered that tinan-
cial conditions would never he in better shape
for this operation at any future time. and con
Seouentlv about half OF these bonds have been
.orverted into 2 per cent consols. not redeem
able until April l. 1890.
There were also Sl9S, 700, 900 bonds redeem
able August l. 1907. paying 3 per cent Half
Of these have been refunded into the lower rate
issue The small issue Of per cent bonds, OF
which S95, 100000 mature on February l, l9oi
was reduced to about $23. 100000. The net result
of these transactions was total interest bear
ing debt on February l. 1901 of 81 ,001 .J00,26o
of which SAB 800 ESQ was In the new per cent
consols. redeemable twenty years hence
S162 3l5 400 per cent bonds due in twenty
four years; S99,915,940 per cents. due in seven
years; S27O4O 100 per cents due in six years.
and only SOD 939. 400 per cents. due in three
years This statement shows that the annual
interest has been reduced by S5,49S.5o3 for
.las A oanfi 4ts
eight years on the per cents and -, 10000 for
four years on the per cents. This is OF course,
only approximate, the exact length of time
depends on the date when old bonds were trans
ferred.
Premiums were naturally paid of such size
as practically to equalze the difference in rate
of interest or bondhoders would have refused
10 trade: but the Treasury was in position to
expend s43, 100000, whereas the annually de-
creased expenditures may cover periods of less
plethcrlc condition. Attention has also been
called by critics TO the fact that the Treasury
will lose the difference of one-half of per cent
in bank tax but the Governments loss I'm this
direction Is obviously Insignificant. while busi-
ness i'm all parts Of the country is greatly facili
tated by the organization Of new banks and the
enormous increase of National bank notes in
circulation, which amounted TO S333.36O391 on
February l. 1901. against S240,SS5.161 a year
previous Just before the enactment of the new
law. rrfing net differences in the amount Of
interest saved are of no account compared with
the great achievement of floating a per cent
bond issue Of such magnitude and maintaining
it 3 per cent above par whereas British consols
paying %. per cent are quoted az &C. German 3s
ar 81. French 3s at 1O1 and Russian As barely
at par.