Money is borrowed in most cases by the sale of bonds. These are of the
same nature as the promissory notes by which individuals obtain loans.
National bonds state the promise of the United States to pay a certain
amount, at a stated time, with interest. A "registered" bond contains
the name of the owner, and this is a matter of record at the Treasury
Department. When this bond is sold, the record must be changed. "Coupon"
bonds are usually payable to bearer; they have attached to them a number
of coupons equal to the number of interest payments due during the term
of the bond. Each of these is cut off as the payment becomes due, and
can be cashed at any bank.
Bonds are bought and sold on the market, and their prices are
quoted in the daily papers. When the bonds fall due, they are
_redeemed_ by the government at their face value, or "at par." On
the market all United States bonds are now selling "at a premium."
Issues of bonds were made in 1898, the rate of interest being 3 per
cent, and in 1900, the rate being 2 per cent.
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