The Old Debt
THE obligations which we have designated as the Old Debt may be classified under two heads.
One group of these bonds is distinguished from the other because of the fact that the bonds in this group have what is known as the circulation privilege, that is to say they can be used by the national banks and Federal reserve banks to secure national bank notes and Federal reserve bank notes. The bonds of this group, some of them bearing interest as low as two per cent. per annum, are quoted only a little below par, notwithstanding the high rates of interest which have prevailed during the war period. This is due to the fact that out of the total issue of these bonds nearly 80% is deposited with the Treasurer of the United States to secure bank notes. At the date of the latest financial statement of the Treasury Department, that for October 31, 1918, there were outstanding $883,360,790 of the Old Debt bonds. Of these $118,489,900 were 4% bonds, $78,894,500 were 3% bonds, $11,350,760 were 2½% PostalSavings bonds and $674,625,630 were 2% bonds. The Fours and Twos, aggregating $793,115,530, are available to secure circulating notes. The 4% bonds are redeemable on and after February 1st, 1925.