Great Falls daily tribune., 1919-11-04

some scores OF people from IhIUph VI
Tacoma, from Providence or Pueblo, or
from some other point on the big map
of the most prosperous nation on earth,
write letters to the treasury department
at Washington and ask advice as to
safe investments for the moneys that
are accumulating in their pockets.
| That department does not want to
put itself in the position of unduly push.
1 ing its own wares, but it has lot OF
confidence in the government securities
| that are kicking about, and really feels
that an opportunity to profit on an in
yestment in those securities is about as
good a thing as one should want. II
! properly pushed treasury officials Will
/ reveal situation which makes it look as
/ though an investor might go far and
fare worse than by purchasing govern
ment bonds.
In all there are ten varieties OF war
bonds on the market. The govern
ment has none of them for sale. They
| are already sold. They are now owned
by the people. The government makes
no profit by their rise or fall. 1t has
got to pay interest on them at par ana
has got to retire them at maturity lt
is all the same to the government II they
sell at 90 or a 100.
The first liberty bonds issued drew
the lowest rate of interest. They were
1 three anu HAIL ~ sAss'
of all the issues this is the one
that is bringing the highest price
These three and a half are now
selling above par. The reason Tor
this is that they are exempt from income
tax Rich folks who's surplus income
goes largely into the Golfers 9f incie
Sam, buy these bonds and are allowed
to keep the whole three and halt per
cent. They are a good buy Tor the
/ 80 ab Al hut fhay ,rplIld the worst
buy in the lot for poor. man wpo IS
not paying high rate OF income tax
It is peculiar that the fourth liberty
loan issue, which pays four and iuarter
per cent interest, sells way below par.
Ii is the cheapest of the government sc ,
curities on the market. 1t sells around
ninety-four. 1t is not exempt rom IN
come tax, and SO is not so good Tor the
rich man. 1t is fine, however, ior the
poor man. 1t is worth more than ninety
four The reason it is cheap IS largely
due to the fact that there is so auch OF
it. 1t was the big issue. There IS SIX
billion dollars worth of it,. There IS al
ways a certain per cent or BOND hoiaefs
who are forced TO sell for one reason
or another. Of big, Issue there are are
more holders who put their bonds on the
market The old law Of supply and de
mand works and the price is run down
The fourth liberty loan four and guar
ter. at the present price, pays III pei
cent on the Investment.
The bankers fayorte of the llhert,
bond is the third four and quarter
These bonds mature in 10 years. The!
are selling a little below par. Inc IN
terest is good and the early iJaturlt!
insures a profit on the buy. At tn
present market price they figure e
yield 4.ST on the money put into them.
Then there are the second fonrs an'
a quarter. They are the buy o. then
all that just now yields the highest re
turn on the investment They sci
around ninety fonr The government
has the privilege Of retiring them IN ~
and will probably do so, This mean
that there will be q profit OF six cent
on each dollar This added to the IN
terest that will be collected in the mean
= time means that these government bond
, are today a SIS per cent investment
which is mighty good for the bonds
the government which is the most finan
, ciany sound Of any in the world.
These figures are based on the know
{ fact of the rate of interest paid on thes
bonds, and the known figures at whic
: speculative in government bonds bough
: at these figures. One knows exactl
what his returns will be
) But there is a speculative element /
! the purchase Of government bonds. he
E fore the war. for instance, this govern
[ ment was able TO sell its bonds at pa
! when they bore interest at the rate OF
per cent When a nation is at war, II
matter how strong it may be, its seeul
J tiles will not sell as readily as in time
o. peace. It must offer higher rates Z
: interest. The United States offere
I, those rates of interest 1t sold most {
its bonds around four and half.
will continue to pay that four and ha
Z until their maturity which will be 10, :
and 30 years.
II it is granted that. after we have II
p turned to normal conditions, the rate I
;. interest the government will have to pa
J will be as high as three and half =,
4 cent, there will still be a handsome IL
terest premium on these long time loan
: 1t can hardly fail TO be true that tt
: prices Of these bonds will rise in Il
open market. One Of these liberty los
bonds can sell at 120 and yet yield
O 3 per cent return on the investmen
Those wise in finance believe that j.
e will be about the normal price of Il