The central record. (Lancaster, Ky.) 18??-current, 1920-07-01
TREASURY
OFFICIAL
Relates Reason OF FL
nancial Stress.
People Bought Liberty Bonds For
Patriotic Reasons, But Do Not
Feel Like Working, Saving
And Paying For Them.

prices " commodities are niTn Wa
authoritatiycly explained recently be.
fore the Acad smy Of Political Science
by 4. G. LefTingwell. assistant sec.
Rotary 81 the Treasury.
At this critical moment. be said,
many ~ our people have turned
gamblers and wasters. For plain
living and high thinking We nave
substituted wasting and pickering.
We enjoy high living while We grum-
BILE a. the high cost 81 living silk
stocking and shirts for the poor, Of
automobiles for men ~ small means.
81 place, FOR the rroftecr and the
plutocrat
"For five years" he continued.
"thc world has been consuming
more than 70 produced. living upon
it, capital and the governments Of
the world have been issuing cyi-
denccs - indebtedness Co represent
the wealth destroyed This has
caused world initiation 81 prices.
when they were issued. no one
could forcscc the probable course Of
the market FOR Liberty BONDS and
Nictory Notes boz the future with
amy degree 81 confidence \ year
ago. . Was irce,y predicted By
financial authorities that Victory
Note would shortly 60 20 pre-
MUM and that Liberty Bonds would
be selling az or near par within a
year or two.
Everyone knows why these san
guinc expectations have not been
realized With the armistice and
still more after the Victory Loan,
our people underwent a great re-
action Those who had bought
Liberty Bond, a. matter ~
patriotism but not a. investors be-
gan 90 treat their bonds as so much
spending money. Those who had
obeycd the injunction 20 borrow and
buy Liberty Bond, ignored the COM
Elementary injunction % save and
pay for them.
In my judgment, the present de-
probation 81 Liberty Bonds on the
market Is due chiefly TO the fact
that 81 the 100000 900 Americans
who periodically subscribed during
the period ~ the war, large numbers
have not been willing or able 20 cN-
ercise such control over their per
lral expenditures as would enable
them 10 retain their bonds after the
cessation 81 hostlities Liberty
Bonds. like other bonds. are subject
20 market influences. including the
law Of supply and demand, and their
market quotations have declined in
consequence Of the failure Of the
great investing public 20 save In
proportion TO the enormous expen-
ditures Of capital during and since
the war
Many patriotic people bought
Liberty Bonds and Notes under the
impulse Of patriotism who have been
unwilling since the war VA, over
Co continue 10 lend their money to
the Government and have forced
their holdings on the market more
rapidly than others could save funds
20 invest, with consequent iepreci-
alton boz market price,. The remedy
for this condition b. for people 70
work and save. 20 Keen their hold
Irgs Of Liberty Bonds as invest
monts and purchase additional gov
eminent securities with their savings.
AS the Treasury views IL. the
Liberty Bond problem i. chiefly one
of quantity Unfortunately many
holders Of Libarty Bond, who
periodically subscribed Tor and held
them during the war have since re-
garded them as so much spending
money and thrown them on the mar
ket.
People generally have been
spending money freely and saving
relatively little, 50 that there has
not been sufficient capital saved TO
overcome the pressure upon the mar
ket from those who bought bonds
as patriots but not as investors. I
think most competent judges, how
ever, believe that the equilibrium
has about reached between sales and
purchases Of Liberty Bonds and that
the Liberty Bond market will soon
turn upward; government bonds, in
fact. could not well be made more
attractive than they are az present
market prices.
"The eason Liberty Bonds and Vie
tory Notes are deprecated today Is
not found in the terms Of the bonds
and notes; Il is not 20 be found In
the interest rate or in the tax eN-
emptions; il is TO be found in the
fact that the demands for capital ex-
eeed the supply and the demands
exceed the supply because the whole
a