Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1906-08-20
W'SBONDJUGGLE
AN INSIDE OPINION ON The RE.
CENT BOND ISSUE.
Inc New York Times Explains Whv
the Panama Bond Issue Was Sold
at a Premium of 2 Per Cent.
Bonds Were Wanted as Basis for
National Bank Circulation.

NdIiOndI Ddnk circulation.
Secretary Shaw is being congratulated
upon all sides on bis success in f1oatino
an issue OF government per cents. at a
premium, something without pre- cedent
in the financial hi-tory OF any country.
We add our own fluctuations to him
personally, and regret that the country
will have the bill to pay. That the bill
must be paid is certain. The gentlemen
who are paying more for the bonds than
they are worth are patriots, all honorable
men, and capable OF contributing to the
country's relief in times OF need. This
is not one OF those times. The treasury
and the nation are enjoying an excess OF
prosperity, and there is no excuse for
asking contributions in aid of any public
enterprise. Nor will any contributions
be made voluntarily. The difference be-.
tween the fair worth Of per cents and
the artificial price obtained for them will
be paid by somebody, and not the less
certainly because it will be peid un.
awares, If all goes we'll, and paid with
rack interest in the way Of general EN-.
barrassment if anything goes wrong.
And very plain matter is made so
obscure that our republican friends will
shuttle out of their responsibility in the
latter case. andaNill claim inordinate
credit if Provideneesence mofss. tenn pc IS
the financial tempest to the american
lambs.
We suppose therseis mo necessity of
demonstrating that about 104 is not
fair price for 2 per cent. bonds at this
time. Less was bid on Eriday for bonds
having every quality Of thx Panamas,
and the better for their longet maturity.
There is poc per cent. investment money
offering in the market, neither in New
York nor in the world. Our credit is
lmpregnable, but as pure credit it is no
better than that OF other nations which
cannot float threes at par. Whoever is
capable OF thinking that these bonds are
wanted for the income they yield is
capable OF self-deception. But if thev
are wanted for anything except their
yield their price reflects not the credit OF
the United States, but the opportunity
to levy upon somebody toll which is
legal in form but eXtortionate in effect.
The successful bidders are thinking not
OF the 2 per cent. which they will re.
| ceive, but of the uncertain per cent,
which they will demand from those who,
under our system, will have to pay more
than they should for accommodations
that they have right to expect at
lower price,
These bonds are wanted, of course. as
a basis OF national bank circulation, and
they have scarcity value because the
law forbids bank circulation to be issued
in better and cheaper ways. The banks
could ease the money market a trlfe
more by lending directly the money they
must pay for the bonds. But here the
juggle begins. The secretary does not
compel the bonds to be entirely paid for;
part OF the price is left with the pur.
chasing banks. Moreover, the money
already loaned to the banks by the treas.
ury-there have been times when that
simple phrase would have caused thought
if not fright-is under notice of recall
unless these bonds are deposited as Sc.
curity for the loan. The banks simply
had to have these bonds at any price,
and they know very we'll who will pay
the excessive COST
Is any American proud OF these facts?
Is any one too blind to see that this
shuffling and juggling is beneath our
government finance, except in times of
war, or embarrassment like Russia? ?
Are not such doings worthier of a water.
logged trust, with kited promissory notes,
and a total Indifference to what NAV
happen day after tomorrow? And is that
an unfair description OF our treasury
finances, with 1886 6,401, ,454 OF pure fiat
"money" in the form OF forced loan
outstanding ami nearly double that in
the form OF credit money printed upon
silver? Ought We not as a nation to
blush when we read in the concurrent
kilograms that benighted Japan is pay.
ing off its war notes already, whereas
ours are outstanding after generation
Of republican administration at that?
And ought any one to blush more than
those intelligent gentlemen who in their
private capacities teach exactly what we
preach, and in their capacity as national
bankers congratulate Secretary Shaw
upon his success in doing what they de.
clare is inconsistent with national inter.
ests?-New York Times, July %.