Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-09-23
Secretary Shaw's Announce
ment Regarding Bonds.
TO REDEEM THE FIVES
WILL EXCHANGE TWOS FOR
THREES AND FoURS.
Operations May Cause the Addition Of
$2o,oOO,O 900 to the Money
Market.

Secretary Shaw made the following an
nouncement early this morning.
Secretary Shaw authorizes the statement
that owing to the scarcity of per cent
bonds both for circulation and as security
for government deposits. he will renew re-
funding operations to the extent Of $2O,OOO,-
coo, in accordance with the previous circu-
lar. OF the total issue Of $51I 100000 Of 2
per cent bonds the treasurer already holds
for circulation and for deposits $4sO,OOO. 900.
He also authorizes the statement that he
will redeem the per cent bonds maturing
February 1. 1904. paying interest to ma
turity. Formal instructions to the several
subtreasuries authorizing them to redeem
on presentation will be issued today. The
banks that have had on file with the treas
urer for thirty days or more per cent
bonds as security for public deposits will be
permitted to substitute approved state and
municipal bonds therefor which will be ac-
cepted at 10 per cent of their par value.'
The Latest Refunding.
March 26 Secretary Shaw issued circular
to holders of per cent consols Of 1907 and
per cent bonds of 1908. announcing his
readiness to refund these securities Into 2
per cents. They were to be received at
valuation equal to their present worth to
Sitlu an lnCoIle VI "a per CeHtuIIl per
mum, and like amounts Of per cent bonds
issued In exchange therefor at a premium
of 2 per centum." The Secretary's state
ment today was that the refunding now
proposed will be under the same terms as
the previous circular.
The refundng operations under the March
notification closed August 1, the Treasury
Department having refunded about ssOOOO.
600 Ss and As. the majority being per
cents. The amount Of per cents of this
class Rti1l outstanding Ia cOpSt6ara hla ha
total being S16S Of9 600
Toward the close of the recent refunding
operations few bonds were received and
there was apparently no disposition to make
the refund. the holders of the bonds pre-
ferring to hold them for the interest and
as investments. The total amount of the
3 per cents outstanding Is ss1. .472.96O. or
this amount s7,1O5. $40 is held by the treas
urer of the United States in trust as securi-
ty for public deposits and 81 153 $50 as Sc
curtty for circulation. OF the 4 per cents
which the Secretary offers to refund there
Is S3.315,2 200 held In Washington as security
for circulation and 81 100000 as security for
public deposits.
Redemption Of the 5's.
The redemption Of the per cent bonds Of
1904 at their face value. with interest to
maturity. is so advantageous to the holders
of these bonds that 1t is expected that al
most the entire amount outstanding will be
III.
September 1 there was s193S3 O5O In 5 per
cents of this class outstanding. The Secre-
tary's offer amounts to anticipation of in
terest for nearly six months and except
where the bonds are tied up and cannot be
reached they will undoubtedly be presented
Tor redemption 1t is thought at the Treas
ury Department. To aid in this operation
the Secretary announces that banks that
now nave these bonds on deposit as Sc
curtty for government money will be al
lowed TO put up state and municipal bonds
In their place. In case of the redemption
OF the entire amount outstanding Secretary
Shaw will pay out of the cash balance of
the treasury about $40 600 600 which will go
TO swell the amount of money now in bust
ness Should the full amount of 3 and per
cent bonds be presented for redemption this
will cause the payment of more than mil
lion in difference in exchange. The money
market, therefore. will receive addition Of
$20oTO0O0 more
September l the total interest bearing
debt of the United States was S9I4541 OOo
The redemption of the 3 per cent bonds will
run the debt below $500. 10000 and will
put IL not far above what it was before the
Spanish war. March 81. 1898. just before
the Spanish-American war began the total
interest bearing debt of the government
was $sfI ,3G66So. Many millions of bonds
Were sold to procure cash to help paw the
expenses OF the war. Secretary Gage when
confronted with surplus. purchased mil
lions of government bonds back and added
them TO the sinking fund. Secretary Shaw
mas made no purchases to equal those of
secretary Gage. but he has added some to
the SINKING fund He has refunded bonds
to an extent that has reduced the yearIv
interest payments large sums each wear
When the Spanish war began the total
aiioui, VI per cent bonds to mature Feb
ruary l, l9o4. outstanding was $3.50 595 800
These have been purchased and refunded
until the total is only s16S O79 coo
Under Secretary Shaw's announcement to-
day the refunding operations will begin at