The Hartford republican. (Hartford, Ky.) 18??-1926, 1920-04-23
U. S. To CEASE
BUYING BONDS
Treasury Loans For Pur-
chases Tighten Credits
Causing Slump

Washington, April 17-Govern-
ment purchase of Liberty bonds in the
open market, except through opera
ton of the sinking fund, will stop
July 1, Secretary Houston announced
tonight. A beneficial effect" on the
bond market was expected to result,
he said. Other officials said the mar
ket In Government securities had al
ready begun to right itself, and that
bond quotations hereafter might be
expected to trend upward
Mr.. Houston explained that in con
tinuing purchase Of bonds under the
per cent bond purchase fund, the
Government was increasing its float
ing debt while decreasing its funded
debt.
He said current requirements of
the Government were such that, If
purchase of bonds were to continue.
the treasury would have to issue more
certificates of Indebtedness with
which to buy them.
Stabilizing Market, Laws Aim
The per cent bond purchasing
arrangement was planned by Con-
gress to expire automatically one
year after the termination of war,
but the Secretary of the Treasury
was empowered to decide when II
had served the purpose of stabilizing
the bond market-the underlying
reason for its original enactment into
law.
Mr.. Houston's decision, however,
was based largely on the fact that
July l the 2 " per cent sinking fund
provided in the Victory loan act be-
comes operative. He said it was not
his intention to treat the two funds
as cumulative, but to end one with
the beginning of the other. The ap-
proximate amount, set aside by the
Treasury for use in the period be-
tween now and July will be taken
over by the War Finance Corporation |
which will make all purchases of
bonds for which funds are available |
until the expiration date.
Hereafter such purchases as the |
Treasury may make for the bond pur-
chase fund will be occasional and |
not habitual," Mr.. Houston said.
Slump Laid To Forced Sales.
The low levels to which bonds have |
fallen were attributed by Mr.. Hous- |
ton TO forced liquidation by heavy |
bond purchasers-large industrial |
and other corporations who have |
been under pressure to find funds to |
finance their current expenditure
He added that this had come when i;
had been necessary for measures to |
be invoked which would control |
credit and make bank loans both diff
ficult and expensive.
No announcement was made re-
garding the amount of bonds retired
lulOu6u the per Ctul purchase
funds. All bonds bought were o.
tanned by the Treasury at discount
ranging from 2 to per cent, thus
saving the Government both the in.
terest for the life of the bond as well
as the difference between their par
alue and the market quotation.
81 believe the time has come" Mr.
said, when the disappear
ance of the Government from the
except as an occasional pur-
chaser, will have a beneficial effect
on the market for bonds and notes,
both by reducing the Treasury's cur
rent borrowings on Treasury certifi-
Gates of Indebtedness and stimulat-
ing the interest of investment bank
ers and the public in the market for
and Victory securities. This
offers unique opportunity to in
Vestors, large and small, the quota
ions for the bonds being extremely
attractive to investing institutions as
we'll as private investors"