The Birmingham age-herald., 1910-01-27
BOND ISSUE LAW
 WILL BE MODIFIED Conditions of Government Bond Issues Need Betterment OLD AClS ARE REPEALED Secretary of the Treasury Is Author ized to Fix the Denomination of the Bonds-Tax to Be Made on
 Bank Circulation.
OLD AClS ARE REPEALED

Washington, January 26-The admins tration measures for modifying the law regarding the issue of United States bonds and certificates of indebtedness and for fixing the tax rate on national bank note circulation to maintain the parity of the existing 2 per cent issue of bonds, were submitted to Congress today by Sec retary Macyeagh.
 These are designed to remedy condi- tions about which there has been much public discussion and numerous confer ences at the White House. The proposed circulation tax act reads:
 Be 1t enacted that the tax on national bank circulation secured by bonds of the United States hereafter deposited, bear ing rates of interest greater than per centum per annum. whether the parity Of the bonds have or have not heretofore been used to secure circulation, shall be increased over the tax on circulation se- cured by per cent bonds one-fourth of l per cent each half year for each and every one-half of per cent excess over per cent in the rate of interest borne by such bonds"
 The other proposed act intended to rem edy the defects in the law regarding United States bond and indebtedness cer- tificate issues follows:
 The Proposed Act.
 Be it enacted that any bonds and cer- tificates of indebtedness of the United States hereafter issued shall be payable principal and interest in United States gold coin of the present standard of value and that any such bonds may be issued in such denominations as may be pre- scribed by the Secretary of the Treasury
 That any certificates of indebtedness hereafter issued shall be exempt from all taxes or duties of the United States as well as from taxation in any form by or under state, municipal or local authority, and that sum not exceeding one-tenth of per cent of the amount of any cer- tificates of indebtedness issued is hereby appropriated to pay the expenses of pre- pairing, advertising and issuing the same"
 Both these proposed acts specify that all acts or parts of acts inconsistent with the provisions of this act are hereby repealed Secretary MacVeagh, in &C., companying letters, says:
 The tax on circulation now based on per cent consois of 1930 and per cent Panama canal bonds at the rate of one- fourth of per cent each half year anon the average amount of circulation. The other issues of United States bonds Is at the rate of one-half of 1 per cent each half year on the average amounts of notes in circulation. t4.
 Discriminating Rates.
 Ihese rates operate as a discrimina- ton against the $730, 600 of outstand ing per cent bonds As these bonds are only slightly above par and as au- thority now exists for the issue of bonds for the construction of the Panama canal 10 pear notes not exceeding per cent interest the issue of any considerable amount of such new bonds which, under the existing law would be available as a basis of circulation at a tax of only l per cent per annum, would cause them, to be considered a much more desirable movement toward investment than the existing per cent bonds. and would doubtless cause the ? per cent bonds to decline in the market probably below par.
 Tt Is exceedingly important that the market value of these per cent bonds should be maintained at above par, since any decline below par would probably oblige the comptroller of the currency to call on the banks employing such bonds as basis for circulation to make good the deficiency"
 Secretary, MacVeagh gays the author ity for the Panama canaY bonds issue prescribes that they shall be issued in denominations of s10O, $500 and s100O There should be added authority he thinks, to issue the bonds in denominations of 5000 and $10,000 otherwise the laDor of issuing registered bonds in large amounts would be greatly increased.
 Provision is made for payment of tn. interest on the Panama canal bonds in gold coin, but no provision is made for payment of the principal in such coin This omission would render the bonds liable to be paid in standard silver dol lars.
 The authority for the Issue of certif- cates of indebtedness to meet expendi- lures does not contain the usual pro- vision exempting the certificates from tax ation and there is no appropriation to meet the expenses of preparing and issu- ing the certificaes.