The Washington herald., 1919-02-01
LIBERTY BONDS
AID U. S. THRIFT
Holland Says Nation Has
Acquired Saving Habits;
Warns Against Selling.

tsense of pride caused by the realiza-
tion which these little bond buyers
now have through their purchases
that they have become capitalists,
although in a small way. The eX-
ultation which these purchasers
have not been ashamed to reveal as
they have spoken of their bond pur-
chases. have constituted not the
least remarkable feature associated
with these stupendous bond offer
ings by the government.
The transactions seem TO have
awakened new spirit in these !
small investors so that they are |
now beginning to understand the
meaning Of thrift and already per-
ceive the truth that Is in the say
ing. IF you save the pennies the
dollars by and by will show what
you have been doing" In view of
this new ypirit. the wonder Is
whether the marketing of the pro-
posed issue Of bonds to be labeled
victory Bonds" and to amount in
the aggregate to not less than So
OOO. .OOO 900, will stimulate further
pride and qualification through the
sense OF ownership of some of these
securities. although the Individual
amount in each case may be no
more than a $50 bond. For there
appears to be some apprehension
that those who are to have the task
Of floating these bonds will discover
that it is more difficult to do that
now than was the case when ap-
peafs could be made to patriotism
and to the absorbing interest in the
war. and hope Of victory. which
served with other stimulating infiu-
ences to make il possible for a great
body Of the American people esti-
mated at 2O,OOO.O00 to buy these
bonds
g. New Lonn Coming.
There are. however, other reasons
for apprehension. 1t is not an appre-
hsnsion which is based upon doubt
whether or not the issue will be mar
keted within the time limited for the
sale of the bonds. None of those who
are in authority at Washington. none
OF the men OF finance, doubt the sue
cess Of the loan which IS to be Of
fered in mid-spring. But 1t may be
a success not due to the ruling dis
position of the people in large num-
bers to buy the bonds. bat instead
may be based upon the cooperation
Of the American banks. These are
expected to undeTwrite the issue. The
underwriting may Involve large
amount It may. on the other hand. 7
involve no more than the taking up
of that part Of the issue which is
not bought by individuals.
Another cause Of slight apFrehen- !
sion lest the people do not entirely
atsorb the .iCtyi-y loan is based upon
the fsar that Y the bonds be offered
~ ~ ss,te or irterest nominated in :
he sfutfth Ho~rtE .onds. then greater
VIZ ~ the Iifi. ulty in marketing
D,.l o. the other hand. If it should
- 4-sl-iet On fix the rate at > per
c->it as some nave earnestly advocated.
then that may tend to depreCiate the
market value Of the bonds which have
already been sold. some going as far
as 70 say that 5-per-cent victory
bond will cause "a depreciation i'm the
market value of the previous loans
SO that they may be quoted as low as
ninet-'.
II Is 4 delicate. dinicuI. question to .
answer cor-ectIy The answer will af- |
feet not only the marketing Of the .
loan which is 20 b. offered in April |
but also the 2r.OO.Up Of little bond .
buyers so-called. who have invested .
their savings in the four liberty loans. !
OF course. ultimately all Of the bonds I
will be redeemed by the government Z
at par. for that is a part Of the con- /
tract. But for some not yet well un- |
derstOOd reason these earlier issues J
have been depreciating so that II any (,
OF those who out OF their small means /
purchased a SO or a 800 bond should /
be compelled by necessity to sell it |
he would receive, not the amount I
which he paid for the bond. but in /
stead considerably less. No one pre- |
sumes to say that this reflects a de-
probation Of the credit OF the United /
States government. But. as yet, no |!
one is able to say what the reason is |
for the depreciation below par Of the |
four series Of liberty bonds.
What Future VIII show.
No longer is there any restriction .
" hich for some months has been
8lTaIIy. although not legally. en- q
forced upon the amoIint Of the loans I.
which shall be- made to those who
deal in securities or to others. No
longer docs the so-caIIed money pool
exist II has been disbanGed and the
SiJ ad.OJJ which Represented the ag-
greGate money resources OF the pool
arc TO seek profitable use. il any can
be fOuHL. The securities market Is
now free. liquid and impersonaI The
law OF demand and supply will con-
-rOl dealings in that market Anyone
" no has a block of securities to sell
can find out upon the instant what
the value Of the securities is. So it is
said that we shall see speedily
whether the sUTmise is correct that
he restriction upon loans which was
|-ecently made and which was proved
% be or influence not only in New /
York but throughout the country.
Nss one OF the causes of depreciation
below per in the value Of the bonds
ssued by the government and called
liberty loans.
not yef has anS proof that would
or sustained If offered in court bean
q ven TO show that the restriction
pon loans com-elled many to part
kIh their liberty bonds in order 10
I'VE their credit and to relieve them
rom embR rrassment. Many persons
tEho were called upon TO increase
Yheir margins were unable to do that
because they could not borrow the
money and they were therefore COM
Pellsd TO submit to the sale of lib
rty bonds which constituted a part
the collateral for their loans, or
lie they offered these bonds for sale
nd they were sold Undoubtedly the
estriction when loans did serve to
4 the government but the impress
on is very strong that il also in
art explains the depreciation in the
harket value Of the liberty, loan
onds Now that the restriction has
zen removed and a normal market