Bisbee daily review., 1911-04-02
SMALL INVESTOR IS
 EXPECTED TO PURCHASE
Said to be the First Step To- ward a Central Bank Like That of Great
 Britain
CBy Victor Elliott.)

WASHINGTON, D. c, April 1.- One of the most important financial innovations ever inaugurated by the federal government will soon be made by Secretary Franklin Mac Veagh, of the treasury department
 About June l or July l, he will of fer for sale $5O,000.00O worth of Pan anna canal bonds, bearing per cent interest. The announcement of this issue six months ago did not create any excitement, nor did it effect Wall street in the least The financiers. however, were somewhat perturbed when it was found that congress had decided to issue the bonds without giv ing them the circulation 6rivileges That is. national banks cannot buy the bonds and issue bank notes on their security The only hope of a profit in this connection for finan ciers will be small commission for buying the bonds for customers, who will hold the bonds for investments.
 First in 50 Years.
 When these bonds are offered for sale, it will be the first time in the history of the treasury department, since the enactment of the national banking law, nearly half century ago, that a similar bond issue was contemplated, an issue without the circulation privilege, By circula tion privilege Is meant the use Of government bonds by national banks as security for bank notes which they issue as money.
 There are already outstanding about $35,0000,0O0 worth of Panama canal bonds, but they only bear about 21z per cent interest. These have the circulation privilege. The contem plated issue, however. will only be held by the investing public Should banks buy them, about the only use they can make Of them will be to re sell them to private parties who aIe looking for gilt edge investments Should the money market be flooded. money easy, and at the same time hard to loan, it may be that only few of them would tie up their sIr plus in this way
 What is Expected.
 What the secretary of the treasurf does expect, and what is most hkeiy to happen, is that the people of the United States, the ordinary folks with small amounts of money hid away in national banks or in private banks, drawing very little or ID in terest, will buy those bonds and hold them as security. They afford the best security in the world. They will be easily convertible into cash, and are as good as gold any day in the year Should Secretary MacVeagh wish to float loan of ten times the amount of the issue it is assured that these bonds would sell easily for the issue and would cause a tip pie on the financial market
 iThe significance behind the move ment to obtain an issue of bonds without the circulation privilege was but dimly observed by a number os congressman and experienced finaa ciers when the last congress enacted the legislation that pe5miated the issue of their bonds Certain astute gen tlemen in congress were well aware of what was behind the scheme What was in the wind was simply that the United States government is on the eve of great revolution in it's bank ing system. the adoption of a system which in the future will include the issuance of government bonds only for spraefruauf r,r.r-rooaC
 Sound investments.
 At present every bond issued by the government has the circulation 1 privilege. The new three per cent Panama bonds will be the only excep ton. With their issue new finzn cial order will be inaugurated. Goy