The sun., 1918-08-26
BY WILLIAM JUsTUs BoIES.


lures will cause a spirited controversy
and may have direct bearing upon the
canvass for the fourth Liberty Loan
a month hence.
A Nation of Bond Buyers.
For the three war loans put out by
the United States during the last nj
teen months the Government received
bids from 31,1oo.000 subscribers. whose
applications aggregated $11,sz2,7SS,-
500. This was probably the most ex-
traoryiinary response ever made by
the people Of any nation in the same
length Of time, and resulted not only
in giving the Government the money
1t needed but also in broadening the
bond market by bringing to 1t the
support of fully 100000 900 people who
before these war loan offerings never
knew what 1t was to purchase a bond
for investment. The amount Of the
bonds actually distributed by the Gov
eminent as the result OF these three
loan offerings was s9,97s. 900. This
means that United States Govern
ment bonds, instead OF being held by
rich investors almost exclusively, as
was largely the case before the war
began, have come to be a household
possession throughout the length and
breadth of the land. This has been
movement of immense significance
and shows that the United States will
have a bond market of great poten-
tial strength after the war Is over
and when the work of financing the
world back to q peace basis is seri-
ousiy taken up.
"Quitters."
With the distribution of such tre-
mendous holdings in so short a time
1t stands to reason that thousands OF
the bonds will be constantly changing
hands and that the market for them
will continue active. This is inevi-
table, since the bonds have passed
vestors, S34,366 coupon books, repre-
senting $50 and 500 investments, hav-
Ing been purchased in this city alone
during the last Liberty Loan canvass.
Nearly s50,00o,000 Of the third Lib
erty Loan bonds were sold on the
partial payment plan by the New
York committee, and the probability
is that instalment buyers will fig-
ure even more prominently in the
next offering, since the various COM
mittees will undertake the most COM
p!ete house to house canvass yet at
tempted by any Government in the
effort to place q huge war loan with
genuine investors. 1t is to be hoped.
therefore, that the country will not
the Secretary's criti-
cisms Of those who have not retained
the bonds that they have purchased.
Thousands Of subscriptions were made
to all three Liberty Loan offerings by
people who believed that they were
doing their country a service in help
ing the distribution Of the bonds, even
II they subsequently sold out their
holdings. Since the sales in nearly
every case were made at a loss it is
clear that the sellers acted in good
faith in originally subscribing for
bonds which they knew they could
not retain as permanent investments.
The Treasury head evidently did not
have such sellers In mind when he
criticised those who had marketed
their holdings, but the reference is
capable of misinterpretation at a time
when the whole country must coop
crate in making the forthcoming loan
the most stupendous success in the
history Of war financing.
Strengthening the Reserve System.
With the Ambulance into the Fed
eral Reserve System of the Illinois
Trust and Savings Bank and the
Northern Trust Company of Chicago
two of the strongest State banks
in the country, having aggregate de-
posts of $4,000, OOo-the movement
TO make the Federal Reserve System
thoroughly representative OF the
country's banking strength has gained
fresh impetus. The Presidents ap-
peal to all State institutions to join
the system in the effort to fortify the
country's bank position as a distinct
help in winning the war has been in
strumental in swelling the number of
State banks now affiliated with the
Federal Reserve System to 5s9 hav-
ing total resources Of 5000, 068,8ls.
This represents a remarkable change,
for as late as May, 1915, only seven"
teen State institutions, for the most
part country banks, had Joined. Fifty
three State institutions OF large ag-
gregate resources We're admitted last
month and the probability Is that the
August record will show further i'm
portant accessions. With the lib
eralization OF the Federal Reserve act
to enable State banks and trust COM
panles affiliated with the system to
continue their trust business, as well
as other powers conferred by State
charters, most of the barriers keeping
state banks out OF the system have
been eliminated.
Rush to Join.
The probability is, therefore, that
the rush OF State chartered institu-
tons into the system will become
more pronounced as the position of
the money market grows more COM
plicated. for in such a situation the
rediscount facilities provided by the
Federal Reserve banks are of the
greatest importance. There are still
several thousand State banks and
trust companies that have not Joined,
so that much missionary work re.
mains to be done by the bankers in ses-
sion at Chicago next month, when "A
further effort will be made to obtain
recruits for the Federal Reserve Sys-
tenn, The perplexities OF q war mar
ket have drawn hundreds Of the State
-