Evening star., 1908-01-20
Possibilities Of the Plan.

ESTIMATING the surplus currency that
would be invested in convertible bonds
for an average Of four months in the year
at $3.50, 600. 600, the same being purchased
in the season Of plethora to reduce the
volume of money and exchanged for cur
rency again when needed to move the
crops the extra cost would be (at 1.S21z
per cent per annum) something In ex-
cess of $4,000 or an increase of I
per cent to the ordinary expense Of the
government Cs2S. .O0O) in furnishing the
money in circulation.
This series of bonds would make it
possible for national banks and other
| banking institutions to rid themselves OF
large accumulations Of money either In
specie or currency in those seasons OF
the year when the commerce Of the
United States receives large. balances in
money from foreign nations. They can
convert 1t in any amount into convenient
bonds receiving low but sure rate of
interest for every day the bonds are in
their possession. and they receive interest
accrued from day Of purchase to day OF
delivery and the principal on return of
the bonds any day. at their pleasure. In
the law creating this series of bonds 1t
should be specified that the currency re-
serve required by law of the national
banks may consist In part Or entirely OF
these convertible bonds.
This series Of convertible bonds in Its
lower denominations will serve a useful
purpose In accomplishing to a large extent
what is expected Of a postal savings sys-
tenn.
The denominations of convertible bonds
should be 500 Interest, at 1921 per cent.
being one cent per day.. $1,000 Interest
10 cents per day., $4,000 Gnterest 81 per
day., and 100000 Interest $40 per day.,
for convenience in handling the surplus
currency,ein. national banks, The interest
as indicated is an even sum per; day, and
~ ho hock nf tha hnyd ia nrirfoI a fah hlo
enabling one to tell at any date just wha t
the accrued interest is. A new series of
bonds Is printed for each year. but inter-
est may be continued at option of the
the last month. when. it should be ex-
changed for bond OF new series and
the accrued interest paid.
In Small Denominations, Too.
Resides these four bonds there should
be. three others of smaller denomination
mot only to reach the small boards but
to accomplish the best part of the service
Of postal savings b@nk), viz. twenty,
ten and two dollar bonds; the twenty
dollar bond buying and selling for the
principal plus cent accrued interest
for each ten days: the dates printed on
the back of the bond showing the date
when cent additional is added to the
principal Of the bond In buying or selling
it. e. g.:
"'This bond draws interest at one-tenth
of cent per day and sells or buys at
any money order post Office In the United
States with accrued interest. as follows:
January 10, cent; 20. cents: 30. 8 cents !:
February 8, 4 cents: February 10, 5 cents !:
etc. all being printed In full on the bond
It Is further specified that this bond Is
exchangeable at any time in the year
09O6) in part payment for a two hundred
dollar bond. being worth one-tenth of the
principal of the two hundred-dollar bond
plus one-tenth of its accrued interest,"
"The ten-dollar bond is similar, except
that its intervals of adding I cent to
the value of the bond are twenty days in
stead of ten days.
"The two-dol!ar bond has to be so drawn
that 1t pays a little less interest, namely,
1% per cent instead Of 1.S2k. because ii
must stimulate its holder to buy from
time to time, at brief intervals, other
bonds of like denomination and exchange