New-York tribune., 1920-04-19

remains supremely good. and all those
who hold its obligations may rest as
sured that they will regularly receive
their interest payments and their prin-
cipal in full when due. In this sense
their bonds and notes represent the
fullest expression Of safety. The holder
Of Liberty bonds and Victory notes
who must sell now. however. must take
loss. At the cloS Of last week the
value Of the bonds in the open market
was tho lowest attained since they were
issued. The decline represents an ad-
justment to the prevailing level of in
terest rates, which have steadily been
rising in recent months. The Treasury
Department recognized the new level
by Offering three-month certificates of
indebtedness at S per cent and six
months paper at 5A per cent, whereas
previously. the highest rate paid was
Az per cent. Two railroads of high
credit have met the market rate by
paying per cent for funds from the
investment market.
The successive increases in discount
rates since last November has induced
the banks to raise rates to their Gus
toners on loans made to carry Liberty
bonds which individuals had been un-
able fully to pay for at the time of sub
scription. In some instances 1t is
reported that the uate has been boosted
to per cent. The disparity between
the return on the bonds and the cost
of carrying them led to flood of
selling. Outstanding corporation and
railroad bonds. like the government
issues, have moved downward likewise
to bring their return to investors up
to the present market rate.
1t will be reassuring for the timid
investor to know that in the midst of
the present wave Of selling the saw
ings banks, which are expert Judges of
bond values, have been the principal
buyers Of the offerings.
A bankers view Of the serious stu
alton confronting the railroads of the
country by reason Of the lack Of credit
Is presented by Edward w. Decker,
president Of the Northwestern National
Bank of Minneapolis. who says: 1T is
quite apparent that united and de-
tcrmined effort on the part of all our
people, as we'll as those connected with
the railroads, will be required to work
out this problem in the next few years
If we are going to continue to grow and
extend our business. There must be
a complete change Of attitude toward
the railroads and their future. AS one
Of the greatest factors in our business
life, we must regard the transportation
industry as business, the crippling
Of which any further would become
national calamity. It is utterly i'm
possible for this country to prosper
without prosperous transportation
system and an adverse effect would
doubtless be felt all along the line.
from laboring man to capitalist. If
the transportation systems are allowed
to develop their properties to q state
of efficiency commensurate with the
natural growth of the country, al
though doubtless requiring many years
of persistent effort and close applica-
ton to the best business principles,
there is no reason why this country
should not long enjoy period of rea-
sonably continuous prosperity. This
calls for more economy on the part of
the general public, because to invest
money we must first save it, and while
parsimonious program is not de-
sirable,. undoubtedly reasonably eco
nomical one is imperative. In order
that we may create wealth necessary
to be furnished to the railroads as we'll
as to all other worthy enterprises, the
volume of whose activities is stupen-
dous, we must first make money, then
save some Of it, and invest it in these
securities, or 1t will be impossible for
US to take advantage Of our present
great opportunity"