Democratic Sentinel, Volume 18, Number 5, Rensselaer, Jasper County, 16 February 1894 — MILLIONS IN BONDS. [ARTICLE+ILLUSTRATION]

MILLIONS IN BONDS.

HOW YOUR UNCLE SAM BORROWS MONEY. All About the Recent Flfty-MUllon-DolUr Loan The New Issue of Two Kinds, Coupon and Registered-Great Fortunes Invested. Odd Things in Securities. Washington correspondence: The new 5 per cent, bonds will soon he scattered alrover the United Stales. They are but a drop in the bucket with what Uncle Sana has borrowed since he began business a little more than one hundred years ago. The total amount of bonds sold by the Government Irom the beginning of the Union down to the year 1880 was ten billion sir hundred and ninety million dbUirs, a sum which makes the mind dizzy, afid which would buy up a dozen of the small monarchies of Europe. This vast sum includes the bond issues of the United States up to that time. Many of them were made to fund previous loans, but interest was paid on every one of

these dollars, and tho gold which has been spent in this way by Uncle Sam would gild the great departments of Washington and leave enough to make a solid gold statute as large as that of the Goddess of Liberty which stands on the Capitol dome. Fifty years ago if a Secretary of the Tieasury had made the statement that in half a century the United States would be borrowing money at 3 per cent, he would have been looked upon as a fool and a madman, but there is no security in the world better to-day than that of Uncle Sam, and it is believed here that a 2 per cent, bond could be floated. Every one wants these bonds. They feel that their money is safe and that this $50,000,000 in bonds is surer than safe deposits of stocking under the rafters. Have you over seen a Government bond? It is only a piece of paper, but it is often worth its weight in diamonds. The bonds of the present issue are in denominations of SSO, SIOO, SI,OOO, and SIO,OOO. The bonds are of tne same size and the difference is shown by the figures on their faces. These bonds run for ten years and they bring in 5 per cent, interest. A Valuable Commodity. The new 'bonds aro of two kinds. One class is of registered bonds and the other coupon bonds. The coupon bonds are payable to bearer and to them at e fastened a number of detachable coupons about the size of an old Kt-cent shinplaster. The interest is payable quarterly, and every three months you clip off these coupons and cash them at the Treasury of the United States or at the banks. Any bank in the c untry knows just what they are worth and will pay you the interest on them. You can use the coupons and the bonds in business deals and their value is so well fixed that they could almost pass as money. The chief danger is that no identification will be asked at the bank by the man who presents it. As to the registered bonds, these are of a somewhat different nature. They have no coupons and are pay able to the person whose name is written on the bond. In the office of the register of the treasury at Washington there is a record kept of the men who hold these bonds, and about a wagon lead of ledgers and journals are devoted to this purpose alone. As soon as a bond is sold an account is opened with the person who buys it between him and the government, and in this is stated the amount he paid for the bond and the rate of interest Every three months the clerks go through the books and make out a set of accounts. They notify the Treasurer of the United States to pay all the interest due to the persons who hold these bonds, and this money is forwarded to them in the shape of a treasury draft. As soon as tho bond is redeemed the account is closed. These registered bonds are the safest investments known to the United States, and rich men put large sums of money into them. Vanderbilt once owned $45,000,000 of these registered bonds. The largest denominations of bonds now outstanding are those of $50,000. The fortunate possessor of one of these draws_s2,soo interest every year and his original investment has increased in value about $7,000. This denominaof bond is held by trust companies and millionaires. There are a great many bonds outstanding of the denomination of SIO,OOO. The holders of these draw SIOO interest every three months upon each bond. The largest issue of bonds ever made by this Government at one time was in 1877, when a total of $741,000,000 was issued. Of course the public debt was not increased to that extent. as a Dortion of the bonds redeemed others outstanding at the time. They had fallen due and Uncle Sam was not prepared to meet the obligation with ready cash, so he did what you would try to do if your note in bank should fall due and you had no

money to take it up—you would give another note in its place. This was a very popular loan, drawing 4 per cent, interest, and was negotiated without trouble. „ An Enormous Sum. There are lots of Interesting things about these valuable bits of paper Unci* Sam issues. If any reader of

this pap»r could have the biggest bond given out by the Treasury Department he would he rich beyond the dreams of avarioe. This bond is nowin the Register’s offioe of the Treasury at Washington. It has been redeemed and canceled by the Government It is the only one of its kind ever issued and it was engrossed by hand. It represents the enormous sum of $15,500,000 and it was given out when the Geneva award compelled Great Britain to pay this country $15,500,000 on what was known as the Alabama claims. The money was paid to Hamilton Fish, then Secretary of State. Congress had made no provision for the disbursement oi this sum. and pending legislation upon the subject Secretary Fish invested the money in Government 5 per cents, receiving one bond of the face value of his investment. The oldest bond now extant is also in the possession of the Treasury. It is a faded document about the size of a $5 bill, dated Feb. (5, 1777, by which the Government acknowledges the receipt of s3oj frcm John Bonfield, which it agrees to repay on Feb. fi, 1780, with 4 per cent, interest. A cancellation, mark on the face shows that Uncle Sam redeemed Lis prepare to Mr. Bonflgld, Uncle Sam has, however, had his money troubles in times past. Hi 3 credit was once quite low, and just be-

forg ancj during the' war the &oney lenders were not so greedy for fcjie government cribs. The first bonds that were sent out were sold with some difficulty and the financial skies looked dark. Many, of the banks Jiad little faith in ttie future of the government and tho

treasury had, to call upon bankers and capitalists to help them in placing their bonds. It was the faith which Jay had in the government that made his great fortune. Jay Cooke & Co. at the beginning of the war did a great deal for the United States treasThe firm possessed the confidence of Salmon P. Chase, who was then Secretary of the Treasury, and they made a great deal of money by taking the bonds from the government in big blocks and dealing them out in smaller lots to purchasers. First Issue of Bonds. The history of the United States bonds is interesting. The first loans ever negotiated by this government were with foreign countries, France, Spain, Belgium and Holland furnishing the money in several small sums. The first issue of anything like a bond for home investment occurred in 1785, when the government negotiated wbat were then called loan office certificates. It was in 1790, however, that the first

issue of bonds to any considerable extent was made. It was-Jouni then that the indebtedness incurred by the war of the revolution was a matter of grave importance. The indebtedness was in many forms and on numerous accounts. Alexander Hamilton came to the front with a plan, which, after a long and heated debate in Congress, was adopted. It was decided to fund the revolutionary debt by means of a bond issue. The bonds ran in three series, the bulk of them drawing 6 per cent interest, the total issue

amounting to about $64,0iXi,000. The scheme proved to be a success, and Hamilton lived to triumph over those who had opposed it. In 18i2 the Government wis again compelled to borro w money. This time ,a loan of $11,000.000 was negotiated,

stock being issued to the amount borrowed, and the revenues of the Government pledged for its payment. Other loans followed at intervals between this time and the beginning of the civil war. It was in 1861 that the Government made the largest loan in its history up to that time. In consideration of the difficulties surrounding the situation and the critical conditions of the times, that negotiation may be classed as one of the signal feats in the financial history of the United States. Uncle Sam borrowed $150,000,00 J on this deal. From time to time since the war the Government has made loans to recuperate its cash balance or to fund previous loans. The interest-bearing debt of the Government on Jan. 1, 1891. exclusive of the Pacific Railroad debt, was $585,639,315.

National Capital Notes. The increase in the public debt during the month of January was $7,830,061. Solicitor Walker, of the World’s Fair, protests against a transfer of award money to the National Commission. A tin box to Mr. Wilson created a dynamite sensation among House messengers. It contained candied fine sugar. Attendance at the White House receptions demonstrates the inadequacy of the building to accommodate the crowds.

The Court of Appeals of the District has reversed the decision of Judge Bi adley in the palmetto trade-mark liquor ca e. Re-establishment of a military department of the South is contemplated, with probable headquarters at Atlanta, Ga. Should Asiatic cholera reach the United States this year, the government has $700,000 left from last year’s appropriation for fighting it. Reports from American Consuls at Sheffield, Barranquilla, La Paz and Cairo show that American Hour is regarded at those places with little favor. There is a possibility that the Senate will pass the George anti-options bill, which seeks to prevent dealing in options and futures by making it a crime. Assistant Secretary of thf Interior Reynolds holds that where several applications are filed for a pension claiment at different times by different attorneys, based on separate disabilities, the several applications pending shall bj considered at the adjudication as one claim and allowed tu such.

SECRETARY CARLISLE.

BUYING BONDS.

SALMON P. CHASE.

IN THE BOND DIVISION.

ALEXANDER HAMILTON