Show WANG fiNANCE PROBLEM CONfRONTS SOLONS IN NEW BOND ISSUE Nations Nation's Credit Must Be Saved While New Debt Is Incurred July 19 flow How to protect protect pro pro- from serious depreciation outstandIng ing lag United States hates bonds Is the Intricate problem which confronts congress In connection connection connection con con- with the authorization of a new Issue and It Is thought Its solution can only be effected I through some equitable adjustment of ot the tax on circulation According AccordIng According Ac Ac- cording to present plans the secretary of ot the treasury will be authorized to Issue from time to time additional Panama canal bonds up to bearing not to o exceed er 3 r cent Interest t nf The g governments government's I Interest e bearing debt at this time aggregates approximately of which nearly national Is le SaI In 2 per banks cent k t bonds on Of this js total i t the of the country n have on deposit in the treasury securities for tor cir cli of about Four-fifths Four of the entire national debt therefore Is In these two classes of ot 2 per cent bonds Under existing laws s national bank notes when secured by 2 per cent bonds are subject to a tax of one half of 1 per cent per annum while circulation based on tax bonds of 1 per bearing eera cent I a It rg higher has been Interest estimated pays irea n a that lt at the pre present market ket price of both 2 per cent ana and Panamas there mere has nas already been on the whole amount outa outstandIng outstanding out out- standing a depreciation from the price at which the e holds them of to rl about 8 and H It is believed W in ht some quarters that to Issue any Considerable considerable considerable consid consid- erable portion of the threes which It Is p d orle orize with circulation p inferior Interior with those accorded the twos probably would result In the further depreciation of the latter which might reach a point even below par thus thu Impairing the public credit Not Many Threes Now There are In 3 per cent bonds and approximately approximate In fours now outstanding The latter however are mostly ht held ld for investment and are little used as 88 a basis for tor circulation and therefore need not bo bt the subject of any special concern In this connection The threes however to the amount of ot are on df deposit In the treasury to secure national bank circulation and any Increase or decrease In the circulation tion bonds privileges would 1 esha have have an accorded an d important any nt cl class bearing ri rion of on their market value The c question tI therefore h before o e congress eon con n gr's gress Is Js how not gt t to discredit I dh the 2 a and 3 per cent bonds now up for circulation and at the same time make the proposed Issue of ot 3 per cents cento attractive to Invest Invest- ors orB A number of ot suggestions of possible solution o of the problem le are known to be under CX consideration o I aB One n of them Is to g reduce tho the circulation tax on 2 per cents to something below the one-half one pf per r cent cont now collected under tho the existing law Another Another An An- other proposition Is II to decrease the ratton rate on t twos os with or without Increasing the rate on threes and still sUi another Is to Increase the tax on t threes ree allowing the rate on twos to remain as at present Remedies Suggested u It Is argued that the government couldwell couldwell could couldwell well afford to reduce the tax on circulation circulation circulation tion In to view of ot the fact that the records record of the treasury treasur department show that the banks have paid Into the treasury In taxes sinco the tho beginning of ot the national bank banking InK system about in excess excess ex ex- cess teas of ot the cost CORt of ot the operation of ot tho currency bureau burau Another proposition advanced is to withhold from bonds of ot the proposed Issue all circulation privileges and still another suggestion Is that the levying a tax on bond secured circulation be wholly re re- re pealed It Is III not believed however that these two last suggestions fu will be taken Into serious consideration |