The sun., 1903-03-27
TOREFUND SHORT. TERM BONDS
Will INCREASE BANK CIRCULA-
TION AND RELEASE CASH.

Secretary shaw Announce That He WIN
Receive Any OF tho Threes Of loOs
and the Fours oS 1905 to an Amsunt
Not TO Exceed sIO0. .O00 .0OO In
Exchange for Long.rerm Bonds.
WASHINGTON. March 2s.-The Secretary
Of the Treasury to-day announced that after
April he will receive short-term bonds
up 10 the amount OF Sl0o 900 900 for re-
funding. It has been, known for some
time that Secretary Shaw was looking about
20 de, ermine what action he could take
10 improve the general monetary situation
and TO anticipate any severe money strin-
sency that may occur early next fall. He
considered several plans and settled upon
the refunding operation. The Secretary
il nthusiastic In his expectations of good
results. He issued the following statement
at so clock this afternoon:
The Secretary Of the Treasury to-day pub
hshed circular announcing that on and
after April !, 1908, he will receive for re-
funding, under authority OF Section II OF the
Act Of March IL. 1900, to an amount not ex-
ceeding 500. 900 600. any OF the bonds of the
sper cent. loan Of ieos-ISis. and the per cent.
fund loan OF 1907. They may be surrendered
at prices yielding to the investor an income
of 2k per cent per annum and the new
bonds win be issued in exchange at pre-
MUM Of per cent Accrued interest on both
old and new bonds will be calculated to date
OF exchange.
There are now outstanding about so7 .000. 900
3 par cent. bonds and sass 900 900 Of the 2
per cent. consols OF 1880. issued under the
act. fours Of 1907. which are affected by the
circular issue to-day. There are also out
standing about s4+s.oO0. 900 Of the . per cent.
consols OF 1880. issued under the Act Of March
II, 1900. These 2 per cent. bonds were issued
In 1000 at par. under the provisions Of the
refunding act.
II the now bonds were to be issued now at
par there would be profit TO the owners Of
the bonds. taking the present market valua-
tion as o basis. Of about per cent. for the
q per cent. bonds surrendered. and about
sh per cent. for the ~ Of 1907. Tho Sec
tary desires TO obtain an equitable share Of
this profit for the Government. which Is the
reason for charging premium Of per cent.
upon the new bonds TO be issued.
Tho circular contains full particulars for
the guidance OF those who desire to avail
themselves Of the privilege Of refunding. and
will be sent to each recorded owner OF regis
tered bonds OF the two loans In question.
The per cent bonds Of the loan of 1904
will not be received for refundins under this
circular. but will be reserved for redemption.
They mature Feb. 1. 1904.
Secretary Shaw said to THE SUN corre-
spondent this afternoon:
.One great reason for receiving bonds
for refunding is that 1t will provide an in
creased amount Of per cent. S0-year bonds
as a basis OF bank circulation. The Gov
srpment tax on . per cent. bonds In one
half OF 1 per cent. on other issues per
cent. The greater market value OF the
short-tsrm bonds. also. 10 an sdverse factor
r. Eposit vi9x fil1sIsssaiier y tSsvssssa'
States as basis OF circulation. The new
bonds will naturally have q lower market
value and will encourage bank circulation.
1T h TO be emphasized also that this
action Of to-day is In anticipation Of any
money strinecncy that may occur next
fall. when large volume Of currency will
he required for moving crops. Incidentally.
IL the whole 500, 900 900 OF bonds are offered
for refunding. something like q. 900 900 or
- 100000 will be thrown into the market
In the way OF premiums on our exchange
Of long-term for short term bonds.
The Secrstary's circular. issued this
afternoon. preecribes In great detail the
conditions under which the exchange is to
be effected The bonds OF the two loans
rnentioned,- the circular says. may be
surrendered on and after April 1. and will
I've received at q valuation equal 70 their
present worth To yield an income Of ~
J,er cent. per annum. and like amounts
IL United States registered or coupon bonds.
hearing interest at the rate Of per cent.
yer annum. will he issued Ia exchange
therefor al q premium of per cent"
In reckoning the Income of az per cent
Of an investor
continue, he ou's.snank onas -"'ua