The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1911-05-23
THE CANAL BOND ISSUE.

The Treasury Department sent out
from Washington last week seventy
seven mail bags filed with invitations
to the public to bid for the new
Panama canal bond issue amounting to
500 900 900. These invitations were adj
dressed to the twenty-thrce thousand
National banks, State banks, and
Trust companies of which the Treas
ury has records Bids are TO be re-
ceived in any amount from 500, $500.
$1,000 TO as high as the bidder may
wish to 60 The bonds will bear three
per cent interest, payable quarterly
and bids can be mailed direct to the
Treasury Department Any one wish
ing to bid can get full particulars from
any Of the National banks, or from
such State banks and Trust companies
as are of record in The Treasury De
partment. and to which the circulars
have been sent Anticipatory bids in
New York on this new issue range from
2.8 TO 2.5 per cent per annum. Some
of the earlier bids were at l03
This is the first time since the re.
fund act of 1900 that L. s. bonds bear
ing per cent interest have been
offered. That act provided for the re,
funding Of outstanding bonds at per
cent. reducing the tax of the National
bank circulation when the new bonds
were used as security for note is
sues. 1t is the first time since the Ma
tional banking system was established
that bonds are offered without the
privilege of using them for security for
currency issues. but it was necessary
TO deprive these bonds OF that func.
tion IN order TO maintain at par the
use to the amount Of three quarters Of
a billion dollars as security for Ma.
tional bank note issues. Eastern
financial journals hail this restriction
on the new bonds as the first step to-
ward tho policy Of transferring the
security Of bank notes from the credit
Of the government TO the credit of the
ba nIis. But, 80 far as all surface a.
pearances go. there is no such purpose
in view as this The cutting off of this
privilege Of using these new bonds as
security for bank issues WAS necessary
for the protection of the two per cent
bonds already so used That is all there
is to it, and any idea that this involves
a new policy toward the banks is fal.
lacious.
But 1t docs do ono thing. It sewers
the tie between the Nation and the Ma
tional banks SO far as requiring the
National banks to bear the brunt of
marketing the bonds. That is what the
National banks hitherto have largely
been required to do and what they
have done. Now the government cuts
loose and issues the $50.0o0.00O Of
three per cent bonds on its own ac.
count. barring the banks altogether on
the currency Issues, and appealing to
the people TO subscribe for the bonds
Heretofore the market price of tho
bonds has been made TO depend largely
upon the profit which the banks
could make in using them as the basis
for the currency issues. The public
debt has been reduced now to within
calling distance Of the note issues of
the banks Without some further basis
of security for the issues, there can
be but little more National bank
currency put forth. The restriction
carried in the new three per cents will
not help the situation at all. but
will, in fact, tend to brace up the
AIdrIch currency proposition with its
Central National hank under the alias
of currency association. A second
new feature of the loan is the is
suing Of bonds of so small n deuomina-
tion rs 800, and inviting public cub
! scriptions through all the general bank