Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1911-06-19
TO START FISCAL
YEAR WITH $4,000 900 IN
TREASURY.
PANAMA BOND SALE AND
CORPORATION TAX HELP
Bond Issue Proves Popular and Nearly
1000 Bids Received-lnvestors' Mar
gin of Profit Large When Sum In.
volved is Consid ered-WiII Redeposit
some Of Money in Banks.
Especial Correspondence.l

year 1911 with a working balance or
more than $SO,O0O,000 in place of the
about s25.ooo,00o balance on which the
treasury is travelling now. This enor-
nous sum, representing the largest
working balance in the treasury for
long time will be composed of the pres
ent working balance. which will re-
main about at its present level thru
the month Of June; S50,000.000 which
Will come in from the proceeds of the
sale OF the Panama canal bonds and
the remainder of the collection OF the
corr oration tax. About 100000 have
been collected on corporation tax ac-
count so far and perhaps s15,000,000 or
$4,000. 900 more will pour into the
treasury between now and the close
Of the fiscal year June 80. Meantime
from one to three millions Of dollars
must be paid out to meet the ex-
penses Of Panama canal construction.
Bids for the Panama canal bonds
will be opened soon. Some 900 letters
have been received by the treasury de-
partment presumably containing bids
and It is the impression of the officials
that the issue has been largely over
subscribed. This IS the first actual
test OF the credit of the government.
thru free bond issue. almost since the
national banking system was insti-
tuted. Heretofore Government bond
issues have enjoyed the bank cfrcula-
ton privilege but this one does not.
hence the offering Of these three per
cents and the price they bring in the
market VIII measure with reasonable
accuracy the attitude Of the people to-
ward government securities as a per-
manent investment. The old two per
cents always have been held up beyond
their real value by the demands Of
the banks for the bonds to cover cir
culation. In the present instance no
such stimulus exists. There is. how
ever. a slight element of artihcial!ty
in the situation. altho 1t is so slight
that 1t will not materially affect the
popular verdict The government now
has some ss7 900 900 in national bank
depositaries which money. OF course.
is secured with proper collateral,
chiefly the old two per cents. 1t is
expected by the department that many
OF the banks Will buy as many OF the
three per cent Panama bends as they
can and substitute them for the twos.
thus releasing the twos and perhaps
increasing the supply Of bank notes.
incidentally. therefore. the Panama ts-
sue may lead to some expansion OF the
currency but only indirectly and prob
ably not IN such measure as to affect
prices or the general situation. Money
is fairly easy in the financial centers
and the banks have no special induce
rnent to Increase their notes
New Bonds Popular.
Judging BY recent transactions in
hnr1s Will bring
highly satisfactory prices. In recent
curb transaction, involving some $780,
600. the bonds were offered by the brok-
ers for 103A. thus implying a strong
popular demand al a high price. AT
1925 the bonds would return little
more than 2s77 per cent on the In
vestment and a 103ss of course trif1e
more than that Should the whole issue
go at an average Of 1902. which would
appear 10 be conserva tive, the govern
ment would be paying only 2924 per
cent on the money ii receives.
These figures are interesting in COM
parison with the rates some foreign
governments are paying TO investors for
money. The most recent prices for
British consols. paying 2]a per cent.
have ranged from 80 to SOS and SOS.
Investments at this rate therefore net
the purchaser-or cost the government
-3ll5 per cent German 3 per cent
imperiaIs selling at So net 3.s14 per
cent and French rentes, paying per
cent have been selling at 90 and there
fore have Melted the investor 3.l5S
per cent If me United States govern
nent. therefore. can sell It's bonds at
such a premium as to bring the net
cost 10 the government in the neighbor-
hood Of 2.90 per cent. this country Is
seen to be in a peculiarly fortunate
position.
Investment Value Of Bonds.
AS many private individuals. as we'll
as banks ard trustees. will be interest
ed in the results of the Panama bond
sale, a table showing the investment
va lue Of bonds at various prices may be
found useful The investment value
Of a : per cent lfty-year bond. interest
PAYABLE quarterly at given prices, net,
will be as follows:
Price Investme Value