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Show AS TO CONVERTING BONDS. Secretary Cortelyou is planning to convert $50,-000,000 $50,-000,000 of the maturing 4 per cent United States bonds into 2 per cent, rather than pay them off. To pay them off now would require a good deal of money, and the retirement of so many United States bonds would inevitably contract the banknote circulation, cir-culation, for which bonds are a required security. The Nation of New York, in discussing the matter, mat-ter, says : "In all, nearly $112,000,000 of these 4 per cents are due for redemption July 1, and of these, some $27,400,000 are pledged against bank circulation. The redemption of the "fours of 1907" will remove the last of the specie resumption issues. Part of this loan was issued by Secretary Sherman between 1877 and 1879 for the purpose of redeeming the outstanding outstand-ing legal tender notes." There is still of the 4 per cents subject to redemption redemp-tion in 1925 some $118,000,000 of the 4 per cent loans made to repair the Government's gold reserve in the troubled days of 1895 and 1896. These are the bonds that the banks of New York forced President Cleveland Cleve-land to issue. They did it by carrying greenbacks to the Treasury and demanding gold, and repeated the operation until .the gold reserve ran down to the danger point. Then Mr. Cleveland and Mr. Carlisle issued these bondsnd permitted no one to bid upon these bonds except the house of Morgan & Co., and they, buying the bonds at 92, had no trouble in selling sell-ing them at 108 in a few days. Somebody made a whole lot of dollars. If the Secretary converts these 4 per cents into 2 per cents it would seem to be a strong assurance of national credit. Great Britain 's per cent consols have lately fallen below 85. French Government 3 per cents are selling at 94. However, it is not a real assurance of national credit. ' The national banks need these bonds, for they have increased in the last ten years in their circulation $370,000,000, and they have to have United States bonds as security, se-curity, making an artificial valuation for the bonds. |