The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1920-08-07
BRINGING BONDS TO PAR.

II believe" said Senator Harding
in his speech of acceptance, this gov
eminent should make its liberty and
victory bonds worth all that les pa
triotic citizens paid in purchasing
them There are probably 10000 900
bond holders in the country today,
and to them Senator Harding's state
ment brings encouragement that their
securities will be enhanced in value
about $500, 100000, restoring the
loss sustained thru depreciation The
candidate implies that If he be elected
he will do his utmost to restore to par
the war obligations of the government
The senator makes no statement re-
garding the method he intends to pur-
sue. But others have been thinking
about the matter and one of the sug-
gzstions offered is the refunding Of all
the liberty issues into, a SINGLE serial
bond issde, bearing interest at the rate
OF 5 ors5A per cent. The market
price, it is held, would go Immediately
to par, the interest return to bond
holders would be increased by from
19 to SO per cent. the entire amount
of the bonds would be retired BY June
Is, 1947. the latest date of any liberty
issue, and the whole transaction would
cost the government no more than an
adherence to the present sinking fund
method.
The advantages of serial bonds over
an issue having single maturity date
were set forth by former Senator John
w. Weeks of Massachusetts in an ad-
dress to the senate on September II,
1918, during the discussion of the
fourth liberty loan act. At that time
he demonstrated how billions of dol
lars could be saved to the, taxpayers
by the adoption of the serial method.
but his recommendations were ig-
nored.' It is not yet too late to Obtain
the advantages of the serial system if
a refunding plan should be adopted.
on May 81 there were Outstanding
approximately s15,9S4. 100000 of lib
erty bonds. bearing interest rates from
az to AZ per cent. and maturing at
dates ranging from September les,
1928, to June Is. 1947. The redemp-
ton date for victory notes is June Is,
1922, and the maturity date May 20.
1923, which are so near at hand that
the notes should be considered sepa-
rately in. any plan for future financ-
ing.
Assuming that each issue of liberty
bonds will be retired on its maturity
date. then it will have cost the taxpay-
ers in interest and principal payments
from June IS, 1921. to June Is, 1917,
approximately s26,142, 900. 900. If
congress should enact a law refunding
all those issues into single serial is
sue bearing 5H per cent interest,
finally retired on June Is. 1947. the
total cost, it is estimated, would be
about $26, 100000
Rhe advantages of that conversion.
as set forth by its advocates, would
be: The probable>return of every lib
erty bond, to par and the restoration
of about $500, 900, 600 TO the wealth
Tof the bond holders; the distribution
the first year among, the bond owners
of about s175, 100000 additional inter-
est, gradually reduced from year to
year as the principal is retired, and
the certainty of the absolute extfn-
guishment of the nations war debt at
the end of twenty-six years. Under
the present system it will run for an
indefinite period, depending upon vari-
Gus factors. such as the discretionary
use of the sinking fund by the secre-
tary of the treasury, and the possible
refunding by congress of portions of
the debt.