Formerly we understood these to be the interest bearing obligations of the United States of America, but now that New York has become such an international money centre, and Americans, like the English, have begun to deal in foreign securities, many of the other government issues - France, Japan, Great Britain, etc., - are largely held here.

A brief sketch of the United States Government's debt from its earliest creation may not be amiss.

Naturally, the first indebtedness was caused by the American Revolutionary War, and, thanks to the far-sightedness of Alexander Hamilton, the debt was properly financed and never repudiated. The new Government of the United States, after the close of the war, found itself burdened with a total debt of $72,775,895. Fluctuations of the debt have been as follows:

Then followed the war with Great Britain, and, as a result, the debt increased in 1816 to $127,334,933.74. In 1835 the country was practically out of debt, then another war, namely, with Mexico, resulted in a debt being created, which was:

The expense of the Indian War increased this debt, until in 1861 it reached $90,580,873.72. Then followed the Civil War, which resulted in the enormous total interest bearing debt Aug. 31, 1865, of $2,381,530,294.96. From this point the debt was gradually reduced, so that on July 1, 1893, there were only $585,073,100 bonds drawing interest, outstanding. During the Cleveland administration, bonds to the amount of $262,315,400 were issued, in order to keep the currency of the country upon a gold basis. During the war with Spain $198,792,660 additional were issued, but after this war a slight reduction was made in the debt from surplus revenues, and on Oct. 31, 1909, the total interest bearing debt of this government was only $913,317,490, which compares very favourably with the debts of other nations.

There are some very salient features about the credit of the United States, which is the highest of any nation on earth. In the first place, our Government bonds sell at a higher price, or, in other words, at a lower interest return, than the bonds of any other nation. There are over $674,000,000 outstanding bearing only 2% interest, being the lowest rate of any national issue. This is due to several reasons, viz.: the existing belief in the ability of the Government to meet its obligations; the fact that it maintains the standard of gold payments, and, added to this, the non-taxable features of the bonds, for they cannot be taxed by either Government, State, or other municipality of the Union, and, last but not least, the privilege of deposit with the government by national banks to secure circulation; that is, the issuing of national bank notes.

Government bonds are issued in two forms, coupon and registered. (See " Coupon Bonds " and " Registered Bond.") The former may be converted into registered bonds of the same loan, but there is no law authorizing the conversion of registered into coupon bonds. Coupon bonds, for exchange into registered, should be addressed to the " Secretary of the Treasury, Division of Loans and Currency." The Department makes no charge for conversion.

In case of loss of registered bonds, notify the Secretary of the Treasury without loss of time in order that a " caveat " may be entered to prevent the transfer of the missing bonds on the department's books. Thoroughly describe each bond, giving its number, the face value, act under which issued, rate per cent., etc., all of which is another argument for retaining a careful description of one's securities. The Treasury Department will not stop payment on lost coupon bonds, or coupons themselves.

There are many regulations in which the investor or dealer in Government bonds should be versed; such, for instance, as relating to relief in cases of destroyed or defaced bonds and destroyed coupons, transfer of bonds, assignment of bonds, and of the same by attorneys, etc., all of which are set forth very specifically in a book entitled " Regulations of the Treasury Department in Relation to United States Bonds," which it is advisable to apply for, as only the most essential points are touched upon in the treatment of the subject herein.

Government bonds bearing interest and outstanding:

The " transfer books " ace closed during the month immediately preceding dates of interest payments, with the exception of the 4% loans of 1925, in which case the books close on the 15th day of the month preceding interest payment. Bonds not received for transfer prior to, or upon, the day fixed for the closing of the books will not be transferred until after the reopening of the same, and, consequently, the interest for that quarter will be paid to the parties whose names appear in the old bonds.

There are many large banks and banking houses which make a specialty of dealing in Government bonds. Transactions are not in as great a volume upon the stock exchanges as through direct dealings with bankers, such as the above, and prices at which purchases or sales are made without the exchange may vary slightly from the stock exchange quotations at the time.

Much information may be obtained in relation to Government bonds from those making a specialty of dealing in them, who, in some cases, have issued books full of data upon the subject.

The Supreme Court of the United States handed down a decision in 1906 to the effect that interest upon United States Government bonds is taxable, whether the bonds are owned by an individual or corporation, and whether the interest is held in the form of draft, check, or money.

Government securities may be considered among the luxuries of investments. Those of our own country and Great Britain rank the highest. Probably nothing safer can be found, if the low interest return is no objection. They always afford a ready market, and are in constant demand among banking institutions, insurance companies, trustees, etc. The market value is, of course, influenced by political and industrial conditions, so likewise of other investments. Government securities are constantly fluctuating, but the price variations are of no great moment. At least, it is fair to assume that even in a great crisis the fluctuations would probably be less than the average of other securities. Although Government bonds are not the most profitable outlet for money, it is unquestionably a fact that some investors would, in the long run, be better off with the low rate of interest afforded by them, than results from their taking a greater risk by seeking in other directions for higher rates.

The writer does not undertake to treat of this subject beyond the two nations above referred to. It is impossible to treat of the Government securities throughout the world.

See also " Liberty Bonds."