The Chickasha daily express. (Chickasha, Indian Territory [Okla.]) 1899-current, 1920-06-02
WHY LIBERTY BONDS ARE
LOW.

Why Liberty bonds are low
and prices Of commodities are
high was authoritatively explain.
ed recently before the Academy
Of Political Science by r. G. LIEF
fingwcll assistant secretary OF
the treasury. At this critical mo
mcnt he said, many Of the peo-
pie have turned gamblers and
MASTERS, For plain living and
high thinking we substituted
wasting and pickering We en-
JOY high living while we grumblc
at the high cost Of living-of silk
stockings and shirts for the poor,
of automobiles for men Of small
means, of palaces for the profi-
tecr and the plutocrat.
For five years" he continued,
the world has been consuming
more than it produced, living up
on its capital and the govern
mens of the world have been is
suing evidences of Indebtedness
to represent the wealth de-
stroyed. This has caused work IN
flation of prices.
When they were issued, no
one could forsce the probable
course of the market for Liberty
bonds and Victory bonds in the
future with any degree of eonfl-
dence. A year ago it was freely
predicted by financial authorities
that Victory notes would shortly
go to premium and that Llber-
ty bonds would be selling at or
near par within year or two.
Everyone knows why these
sanguine expectations have not
been realized. With the armlstlce
and still more fater the Victory
loan. our people underwent a
great reaction. Those who had
bought Liberty bonds as a mat
ter of patriotism but not as m
vestors began to treat their bonds
as so much spending money.
Those who had obeyed the m
junction to borrow and buy hb-
ertv bonds ignored the compll-
mcntary injunction to save ana
pay for. them.
. A $50 bond in the hands OF
patriot turned spcndthrift was to
lin 4 $50 bin to be spent Sat''r-
dav night or to her Il new nat
and if the $50 bill turned out TO
be $45 bill, small matter. Ihls
was the first and most immediate
cause of depreciation of Liberty
bonds affecting them parucu-
larly.
II doubt whether higher rates
Of interest on Liberty bonds
which would have meant more
taxes for the tax payer to m
crease the initiation which mas
been rampant since the Victory
loan. Some critics say that the
treasury should have forcseen the
after-the-war reaction and III or
der TO protect bondholders from
the consequences Of their own
acts. issued the bonds and notes
at rates of interest which would
insure market price for them
at or near par even in the PERIOD
Of reaction.
"This is inflationist doctrine.
The bonds and notes were never
meant to be treated as spending ;
money. The civil war gave us i,
1ur fill of interest bearing cur
'ency. Depreciation in market
,ricc serves as check upon :,
hose who wish to spend their =
,onds. In the history of finance, :
10 device was ever evolved 50 Ell
ective for procuring saving as
he Liberty loan campaign. There h
vas no plan of financing the war =,
r of financing the period of re- ~ ~
d diustment which would protect =
he holders of the government $ q
ccurities or the government $
redit against subsequent folly
nd waste. h.
"Tnstead of telling the people ~ ~
.ankly and boldly that prices =,
re high because they are vast II
e, we fix prices and prosecute 70
rofiteers in order that the peo-
e may buy more and pay less.
lstead of telling the people that y,
iberty bonds have deprecated g.