Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-06-25

The first OF eaCh month Mr. E1CtOy makes
up for Secretary Shaw table showing the
prices of government securities. and this
table is in great demand. It is used not
only in the treasury. but is sought by
banking, business and bond-buying houses
the world over. The table shows the mar
ket prices and investment values of bonds
for every day in the month just gone by.
The government. Of course, wants to keep
its securities at good figure in the mar
Gets of the world. II possible. and knows
that when man goes to buy government
bond he desires to know what he will get
for his money. in addition to the feeling
that he Is making an absolutely safe IN
vestment. The figures of Mr.. Mccoy ex-
plain that April 20. for instance, United
States per cent consols were quoted In
New York at 104ts bid and 1Oofs asked.
fiat market price. The net price was
1Oi 7212 for each 500. How much would be
the investment value OF these bonds? That
is. how much would the purchaser realize
each year on his Investment. the bonds rum
ming until 1880. Mr.. Mccoy shows that
they would have an investment value or
1.766. This investment value naturally
varies with the market price OF the bonds
A per cent bond of the government ma
turing in 1925 is quoted In New York April
81 at 1873 to 1891 fiat What would It be
worth to the investor7 Mr.. Mccoy shows
that its investment value is zoos.
You are the president OF a rational bank
You have on hand 100000. Would IT pay
You to loan at per cent on the ordinary
securities of a national bank or would 1t
be more profitable to buy 100000 worth OF
United States per cent bonds and put
them up with the comptroller of the cur
rency as security for 100000 worth OF cir
culation, which could be loaned at pe-
cent?
The controller of the currency has hun
dreds of requests from national banks
wanting to know things of this kind. ana
Mr. Mccoy Is the man who has to answer
them. The answer depends upon the price
of government bonds at the time IL
bond is comparatively cheap, the profit to
the bank In taking out circulation Is
greater than in loaning the 100000
straight Say that the $4,000 Of bonds
cost the bank S104,91s. Upon this invest
ment the bank is allowed to issue slo0.Ooo
circulation. which it loans to its customers
at per cent. receiving therefrom an IN.
come of $4,000 year. From Its SIoU.oO
bonds 1t gets per cent year. or SZOoo.
making total receipts from this method OF
$1,000 But there Is some cost to this
The deductions are " per cent tax on CIR
cuiation $500; cost of plates for printing
circulate express charge, sinking fund,
etc, S145.7S, making total OF $4ooIa
This would leave total net pronts or ~.
IA % Should the S104.9 be loaned at o
ner cent. 1t would bring In 50 ,295.o 8 year.
The difference in favor Of circulation is.
therefore, 81 0o9.14 each year. or 1O09 per
cent. II the banker had to pay 100000 for
his bonds, the difference would be large. as
can be seen.
4 4
Mr.. McCoy's arithmetic has exploded
many visionary. impossible schemes. from
financial bills to theories Of the universe.
proposed by Smithsonian scientists and
worked out in cold figures. The question OF
the pension of aged clerks OF the govern
ment has been worked out In figures for
members OF Congress who wanted data. and
some funny ideas in this direction were ex-
ploded when they came in contact with cold
figures made by the actuary. Mr.. Mccoy
furnished the internal revenue bureau with
brand-new and complicated tables dealing
with the legacy tax imposed during the
Spanish war and these tables are said to
be as fine piece OF work as any Insurance.
actuary has ever arranged.