Milford chronicle., 1920-09-24
IDLE WAR BONDS TOTAL
$5.OOO,O0O.OOO

DeClarlnS Inat serial issues AFFORD
the most economical bonding meth
DDS, the Republican Publicity Asso-
citation, through its president. Hon
Jonathan Bourne, Jr., issues the fol
lowing statement:
Economists and the public gener-
ally are eyincing a lively interest in
that paragraph of Senator Harding S
speech of acceptance in which he de-
clared it to be the duty of the Gov
ernment to make its Liberty and Vic
tory bonds worth all that its patri-
otic citizens paid in purchasing them.
Inasmuch as there are outstanding at
the present time approximately $780,
O0O,0O0,009 worth of those securities,
estimated to be'in the hands of about
100000 Of our citizens. it is appar-
ent that any suggestion TO restore the
,00000O,00O of sales value they have
lost through depreciation of the mar
. ket commands the immediate attention
of vast number of people.
cone of the most recent authorities
to discuss the matter is Mr. II. n.
Lawrie, an economist Of Washington.
He declares that at the present time
some s5.0OO,OOO.O0O of war bonds are
lying idle in the banks of the coun-
try. They represent bonds placed
upon the market and not actually sold
to investors, but which the banks
were forced to absorb. Mr.. Lawrie es-
Inmates that the retention of such
large volume of undigested war paper
in the banks is consuming fifty per
cent of the normal potentional bank
ing resources Of the country. He con-
tends that the reason why the bonds
have not been taken up by the public
is that they carry an interest rate
that is not competitive with other in
vestments in the bond market, and
that has caused the decline of their
market prices. Sound economics and
common sense business, declares Mr..
Lawrie. demand that the evil be rec
titled at the earliest opportunity
"As a means to that end, Mr.. Law
RE recommends the early refunding
of the war debt into bonds exchange 1
able for those now held. He asserts
that financial experts are of the belief I
that the interest rate of the new issue
would not greatly exceed 5 per cent, /
and that they should be spread over 1
a period of fifty years. If that were
done, says he, war bonds would be on
a competitive basis with other issues,
the huge amount now held by the
banks would be moved, and the in
dustry of the entire country would
feel the benefit of the tremendous in
crease in banking resources.
Victory Notes to the amount of ov-
er S4,OOO,OOO,OOO fall due in 1928, and
Congress must provide a refunding
plan for them. Then will be the op-
portunity to make provision also for
the rest of the national war debt. Not
only will the advantages enumerated
by Mr.. Lawrie be gained by a general
refund to a higher rate bond, but adj
ditional economies can be effected if
the new issue takes the form of SER
ial bonds, fixed proportion being re-
tired each year of the period for which
they run.
1T has been demonstrated by ex-
pert bondsmen that serial issues are
by far the most economical from the
standpoint of the issuing authority.
The State of Massachusetts has pass (
ed a law that all municipal indebted
ness in the future shall take the form
of serial issues, and other States and
some cities in Canada have adopted !
similar policies. During the debate ]
on the Fourth Liberty Bond Act in the
Senate, former Senator Weeks of
urged the serial meth
cd, demonstrating by comparative ta-
bIes the economies of the serial over ,
the antiquated sinking fund system.
Senator Harding, if elected to the I
Presidency. will be free to adopt
what course he chooses to restore q
the true value of Liberty and Victory {
Bonds. 1t is apparent that the means
are at hand for him to carry out the
in his speech of accept
ance. A discussion of the subject at
his time is valuable in calling the
peoples attention to the opportunity
which is theirs to place a man in the
White House with a realization of the
duty to make good the
luge losses sustained by its bond
holders"