Webster City freeman. [volume] (Webster City, Hamilton County, Iowa) 1884-1946, 1920-05-03
49, 81 - HFT fFTT - N-~F -HW|"TFrWI
fly HIGH ALL
oVERCouNTRY
Government, as Well as In
dividuals, is Spending
a Great Deal Of
Money.
GOVERNMENT BEHIND.
Congress Seems Determined
to Beat Soldiers,
Bonuses.
GOVERNMENT BEHIND
By T. d. JONES.

SIuuN luS tliC DuilhIliS SlluAllOl VI III
country, from which it appears tina
the discount operations of the Fedora
Reserve banks during February totalet
$G,517 ,439, OS2,, which is an increase OF
80 per cent over the total for February
1919. War paper constituted 50 pei
cent of the total discounts. for Feb
ruary of this year, hut the proportion
of war paper in the total of customers
paper rediscOunted decreased from &
in February, 1919, and % per cent in
January of his year, to is per cent
for February, 1920. The decrease in
the relative volume of war paper is nc
counted for in the Federal Reserve. Bull
letin as due in part to the diminuti0n
in the volume of outstanding govern
ment securities, in part to the progress
made by the public in absorbing such
securities as long time investments,
and also to the abolition of the prefer
entail rate previously granted" Ac-
cOrding to the Federal Reserve Bull
letin the Improvement of the financial
position of the government is closely
dependent upon the continued mainte-
n of a policy of economy" With
the American public calling on their
bankers to such an extent as TO make
it necessary to shoot six and a half
billions of dollars Of securities-most-
" Liberty Bonds, through the banks
in this manner, there is only n in
ferencc-and that inference is that, as
individuals and us a people, we are
flying high"
Although the war ended a year and
n half ago our government eXpendi-
lures are still tremendous. 1t has rec
emily been reported that England has
..balanced the budget" bringing it
about that government expenditures
are less than government receipts,
But over here on this side of the water
there is but little evidence. of the re-
duction Of public expenses.
Official reports give the governments
total expenditures from April 1G, 1917,
to March 81, 1920, excluding principal
of the public debt, at S$337.455,G45,s53
and the receipts fOrfthe same period
excluding principal Of the public debt.
were $14, l9s,247,7 . The excess OF
tl,e disbursements over receipts for The
war period was $233,2557 5000. and
this amount represents the increase. in
the public debt, or the amount the
country went behind. This great sum
is represented in Liberty Bonds, Vic
tory notes and War Savings securities
that are outstanding.
The Soldiers Bonuses.
The one big drive for economy seems
to be in the determination in congress
TO prevent the former soldiers from
yottinp their bonuses, which ii is csti-
mated would cost the government
So 600, 600, 600. The proposal to issue
bonds TO former service men is oppos-
cd by the treasury department n the
other c~ustodians of the public finances
on the ground that Il bond issue for the
necessary amount could not be floated
on the basis Of interest which govern
ed the Liberty Loans-and If it couid
be put over, that it would tlrthef us
tnrb the credit of the country, which
already appears to have its NAV 1uii
of Liberty Bonds and other war paper.
Another evidence that we are lying
high is shown in the payments Oh
nearly a billion dollars into the gov
eminent treasury during March OF the
first installment of the income and eX-
cess profits taxes for the year 1871.
The reaction in the virtual
strike of pOssessOrs Of large. incomes
apoinst investing in taxable securities
except at higher rates of interest than
were ever known before. Thus the
cost of capital is boosted to take. up the
slack imposed by the government tax
ing process. Industry eventually as
s,mcs the burden. and it is represented
in the higher prices of everything that
is PRODUCED. Since the investment
market fails to function, three per
cent and five per cent interest is no
longer attractive, and eight n ten
pcr cent is expected from industrial
stocks and other securities.
Making the Marc Go.
The money turnover of the co"h-
lrv is terrific in it's intensity, as shown
nv tbe federal reserve statements, but
the mere act of paying up on Lleeft!
Bonds and then selling them or Dor
rowing on them until your o oio
Uncle Sammie grOans under the load'
doesn't get the country anywhere. Inc
process has been so theatrical thar the
l~ionidation seems almost like using
..stage money" But when it comes 10
CAPITAL for industry the story is differ