All that need be said here is that the entries in the general ledger and auxiliary books would be just the reverse of those explained under the previous transaction. Of course, if the circulation is decreased, the 5% redemption fund may be reduced proportionately.

United States Government Securities Pledged To Secure Postal Deposits (6)

Lists of the securities available for deposit as security for the postal savings funds are likewise published from time to time. These lists have been confined to municipals, that is, bonds of the U. S. Government and its political subdivisions. It should not be assumed, however, that all of these bonds are accepted at their par value. In general bonds of major political divisions are accepted at par while bonds of minor political divisions are accepted for only 75% or so of their market value. Assume that $90,000 in book value of Third Liberty 4 1/4's, due 1928, selling at par have been pledged. The general ledger entries for that transaction would be as follows:

Auxiliary Records

What was said concerning the pledge of securities as collateral to circulation applies here. Securities pledged for this purpose should be set up on the general ledger at the value at which they have been carried in the bond ledger. This would mean that in accordance with regulations a security which was accepted by the Government at par but was actually held on the books at $90,000 market value of such securities would be sufficient collateral for $100,000 postal savings deposit. A withdrawal of collateral for postal deposits would involve a reversal of the foregoing general ledger entries.