The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-01-27
The Government Must Save the
Little Bond Holder.

Little Bond Holder.
Digging the bottom from under the
patriotic investments of the little
bond holder is one thing the Govern
ment cannot with respect for itself
20 on doing any further.
The war Is over. Its unreasonable
destruction of wealth has ceased. The
exhausting drain on our Treasury Is
elackened, in theory If not yet in fact.
But in the investment market to-day
the United States Governments Lib
security on the face OF the earth, can
not stand up with an ordinary State
or municipal bond, even with first
class bond of private corporation.
This shocking discount in the mar
ket value of the bonds does not rep
resent merely a quotation shrinkage
in value all told Of pretty nearly three
quarters of billion of dollars. 1t
represents, in truth, colossal loss
actually sustained by little bond hold
ers who have been compelled to sacri-
fee their bonds.
Nobody need think that the little
bond holders forced to sell go into
the general market and get even the
low prices quoted there-the 1925
to 1880 for the first and second As:
the $3.50 for first 4l4s; S94,5O or
$94.75 for second AIS; $3.50 for
third AIS, and S94 so for fourth
4As. The little bond holders, hard
pressed for cash. driven to raise 1t
quickly, go TO the money squeezer, go
10 their butcher or grocer, go to a
liquor shop. go anywhere and take
what they can get for their bond.
There were more than 20,0O00OO
small subscribers TO the fourth Lib
erty loan, with 100000 for the first,
9,4OOOOO for the second, and 1S,3O0,-
900 for the third. There is no ques-
ZION that many small subscribers who
began with the first loan went through
every one up TO and including the
fourth. There Is no question that
more than 100000 of the small
subscribers to the fourth loan had
also taken Of the third loan; perhaps
half as many were subscribers to all
three of those loans They went in up
to their necks; and going into the
various Issues. they get hit by the
shr1nkage Of each or all.
Hundreds of thousands Of small sub
scribers, who have not yet had to part
with their bonds, have been compelled
TO borrow on them. They could have
their bonds taken away from them II
rhe market value Of the securities
should fall below the amounts Dor
rowed on them. With the outstand-
1ng Liberty loans already at low
level which is sickenlng, the United
States Government could kick them
down another FIVE points, perhaps az
much as eight or ten points. II the
Treasury should issue fifth loan on
per cent. basis. 1t could not issue
the fifth loan on a basis OF AZ per
cent. without sending the existing
bonds lower than they are now. 1t
could not issue the fifth loan on a
basis OF even Al per cent. without
taking away the last hope OF the 20
1000 little bond holders that their
existing Liberty bonds might some
how go higher.
The more than 2OOOO,OO0 little bond
holders are estimated by some Inter
nal Revenue and Treasury officials to
have taken considerably more than
half, rather than less, Of all the Lib
erty bonds now outstanding. II they
ere right, there must be credited to
the little bond holders somewhere in
the neighborhood OF ten billions of
dollars locked up in the Governments
securities II those estimates are 10
or 20 per cent. too high, still there
must be credited to the little bond
holders at least some eight billions of
dollars locked up In the Governments
securities
II tic boNeiuiHtHt lssucS per
rent. Victory bond, and II this issue
sends the prices Of the outstanding
Liberty bonds TO no lower a figure
than 90, then through the shrinkage In
value Of the combined investments of
the 10000, 900 little bond holders--the
shrinkage from 800, where the bonds
ought TO he, to 500, where, with the
war ended, they never ought to be
their Investments IN the grand total
" all the holdings Of all the little
bond holders would fall not less than
eight hundred millions Of dollars,
more likely nine hundred millions OF
dollars, possibly clear billion. All