The Waxahachie daily light. [volume] (Waxahachie, Tex.) 1894-current, 1917-05-31
IND
ECONOMIC EFFECT Of
LIBERTY LOAN BONDS
BY FRANK Il. WILSON
Federal Farm Lean Bureau. U. !

WASHINGTON. May s1.--Float-
ling seven billion dollar indebted
mess within a few weeks sounds Coles
lsal.
To the minds OF those familiar With
1.-THE history of large governmental M
financial transactions, it suggs sts dire
possibilities. Heavy borrowing By
lnations has often resulted in price
limitations and great4g added cost at
living. Such result might be pre-
Iuicted for the Liberty loan were it
mot for the fact that precautions
against these i'll effeets nave been
taken.
| Uncle sam nuw practically IL IN
she posltlon of the hoy vho can ear
ais can@y ard keep 1t. While bor-
rowing to IA exteslt greater than any
NATION has ever borrowed at ont
June. he is, at the same time. pro-
saias greatly increased stimulus To
business within his own realm.
| Ii Is not as II this seven billion doll
Lars we're to o. borrowed ard taken
sat OF the country for investment
elsewhere. This Is to be n2ersss d
Ii d nafer Of credit. one Of the conal-
ions of the credit extended to for
| Sign nations being that the money
Borrowed from this government must
De spsslS for supplies within this
country. So Rfaen the UaIted States
liends two hundred million dollars 10
Great Britain, this government mere
Ily assemblies the credit OF It's people
ard lends that credit TO Great Brit
ain to enable Great Britain TO en-
large its operations OF buying cur
supplies. 80 while We are aiding
Great Britain, b. giving her a lower
interest rate than she otherwise
could get, We are aiding ourselves b.
providing new demands upon all OK
our Industries. new demands for la
Dor. larger requirements OF raw ma
serials and a greater market for food
supplies.
The administration mas profitea
from the costly experiences OF other
nations By outlining a policy which
provided for a combination Of bor-
rowing and taxation In order to keep
|aomn the had effects usually result
ant from large borrowing. The most
pronounced LII effects tnat have come
from Large borrowing have come
where nations hare raised all Of
their war revenue by the sale OF
bonds Wherever nation has un-
.deftaKen To raise It's taxation pro-
portienateiy with It's rate OF borrow
ing, this tendency toward price infla-
tioa has been reduced. The secre-
#tary Of the treasury has made gugges-
ftlons 10 congress for an increase in
taxation which Hould produce nearly
two billion dollars annually Ger
many has raised practically ali OF its
war revenue by selling bonds and
has added very little to taxation
Great Britain has followed the GUS
tomary accepted policy OF making
increased taxation take care OF at
least the interest ON increased in
ebtedness
But this tendency to minimize
|price imitation is not the only saving
grace IN the new program Of war f.
nance. The secretary Of the treasury,
instead Of calling for subscriptions
70 the entire loan at one time. called
for only two Billion dollars at once.
Ills object was. manifestiy, 10 distub-
ute the shock Of the loan. Such II
program makes Il possible for this
money 10 be subscribed; IL be- loaned
to European countries; To be expend-
"a for supplies In this country and
to be again distributed to its normal
channels Of business before the next
Iinstallment is called for. Such q plaa
makes il possible 10 handle the Lib
erty loan BY degrees with the least
percentage Of business displacement.
Another provision in the making OF
the Liberty loan which helped 10 re-
Iduce its iii effects 10 the minimum
was that giving the secretary Of the
treasury authority 70 deposit mon
|ey subscribed for bonds in banks
Throughout the country. II ID his
policy 70 distribute these deposits
where the money originates. Thus
again Is provided an excellent safe
guard against business displacement.
The floating Of this great loan viii
afford opportunity for getting a new
angle on the savings habit 81 Amei]-
leans. Heretofore Americans have not
been satisfied Nith The i9g returns
provided for government securities
They have not been buyers ol govern
llent bonds h il said that less than
one-fifth Of ! per cent OF the people
OF the In.ted States are bond own