The Alaska daily empire. [volume] (Juneau, Alaska) 1912-1926, 1920-05-03
LIBERTY BONDS
ARE AS GOOD
IN BEGINNING
Low Price in Market Does
Not Mean that Bonds are
Not as Good as When Sold

In explaining the cause of the low
price of Liberty Bonds and declaring
that the low price in the open market
does not mean that the bonds are
not as good as ever they were, John
u. Calllins, President of the Federal
Reserve Bank at San Francisco, has
written the following letter to Gov.
Thomas Riggs, Jr., of Alaska;
My dear Governor:
There is great deal of confus-
ion and discomfort in the public
mind. involving considerable losses
to individual investors in Liberty
Bonds and Victory Notes because
the market prices are temporarily
below par. 1t is fitting. therefore,
that the leaders, of the people and
men of far vision in public affairs
should present the facts of the sit
uation to the people, that they may
protect themselves and have their
faith in our national government
quickened
Present market prices of these
Government securities are no true
indication of their real value and
do not Justify the implication of
uniformed minds that the govern
ment has failed to live up TO its
bargain with the investors Liberty
Bonds and Victory Notes are below
rar chiefly because many who pat.
riotically lent their money to the
government during the enthusiasm
of war have withdrawn their loans
and thus forced their holdings on the
market in excess of the demand.
with consequent depreciation Of
prices
The public at large probably does
rot understand why this depreci-
alton exists.and should be assured
that the causes hold no menace to
the actual intrinsic value of these
securities.
Liberty Bonds and Victory Notes
were issued in such stupendous
amounts and within such a compare
lively brief period that their ABSORB
ton by permanent investors neces.
sarly require time, with temporary
prejudice to their intervening sale
value. Like other securities, they are
subject to market conditions, the in
exorable law of supply and demand.
Market quotations have declined,
chiefly because of failure of the in
vesting public to save in proportion
to the enormous expenditure of cap
ital since the war, and particularly
for the reason that large numbers
of holders have been unable through
various causes to retain their Bonds
and Notes, since the cessation OF
hostilities. They consequently forced
their holdings on the market more
rapidly than others could save funds
to invest.
The fact that large numbers OF
Liberty Bonds and Victory Notes be
longing to these patriotic Americans
are being sold daily at a loss makes
it imperative that they be convinced
that the Government has paid and
will continue to pay the stipulated
interest on their par value and viii
likewise pay the face value or the
par value of these. bonds and notes
when they mature. The security
behind these obligations is the honor
and good faith, the wealth and taxing
power of the United States of Amer
lea. What the future of these bond:
and notes is, may be surmised from
the following summary of our Civil
War bonds, which also fell in value
the first few years after issue:
United States So twenty yea
500 bonds of 1861 sold in 1866 TO
more than $106; in 1877 they sold TO
$110 gold.
United States 500 bonds of 1862
carrying sc interest and maturing
in from five to twenty years, brough