New-York tribune., 1918-03-17
" OVERNMENT bonds, like people,
T act pretty much like one an


other under similar conditions.
Whether they arc French, English,
German, Russian, Japanese, American
or any other nationality, people will
act according to we'll established psy
Geological traits, laughing at about the
same thing, crying over similar events
and manifesting fear under given situa-
tions. Corresponding to human tenn
permanent, the market value Of govern
ment bonds is also subject to we'll de-
fined changes, and one of the most con-
sistent similarities Of conduct which
history shows to be true of them is
their habit of temporarily going down
on account of war.
ing extent, no matter how stable the
government that issued them is, no
matter how rosy it's military situation,
and no matter how unimpaired the re-
sources behind the securities may be,
guaranteeing the prompt payment of
their interest and their redemption for
full face value at maturity.
But just as consistently as history
shows that government bonds go down
during the war no less does it record
that their usual habit has been not
only to recover to their original prices,
but also, in many instances, to rise to
a marked degree above it after the end
Of the war. This recovery has been
manifested even by bonds of a nation
suffering severe defeat, involving Sc
rious impairment of the equity behind
its bonds through the loss of national
territory and through the obligation
forced on it to pay the conquering ma
tion large indemnities.
Second Liberty Bonds
Follow Precedents
At present the second Liberty bonds
are quoted in the market at about 9G.
Taken as a detached condition, with
out regard to history and looked at
simply from the narrow pocketbool
point of view, the fact that something
you paid $500 for short time ago will
bring you only about 500 at the pres
ent moment may seem to be dsquiet-
ing. But it simply means that United
States bonds are now doing what the
bonds of all nations do in war time.
Our bonds have deprecated to a
lesser degree than most government
bonds have done under similar cir
cumstanccs. One instance may be cited
where the bonds of foreign govern
ment went down to almost SO during
war, but, although that nation suf-
fcred a crushing defeat and tremen-
dous material losses, within a compara-
lively few years after the war was
ended those same bonds went up to
more than 105.
The fact that your 500 Liberty bond
is now selling for about 500 does not
in any sense imply loss of intrinsic
value or uncertainty either as to it's
principal or interest. 1t implies mere
ly that because Of complexity of
economic factors your government
bond is normally following the way of
its historic antecedents. Even though
Liberty bonds have thus fluctuated to
prices below par, there has been abso-
lutely no tluctuation in the fact that
the government will go on paying the
promised interest ON them without
delay as it falls due, nor in the fact
that when the time comes it will re-
deem them at the full face value, re-
gardless of the ups and downs in the
market quotations meanwhile.
These changes in the market quota
tions OF government bonds during wars
are, in the history Of nations. ANALOGOUS