The Manchester journal. [volume] (Manchester, Vt.) 1861-current, 1920-11-04
Is HOUSTON TRYING
TO KEEP BONDS DOWN


Washington, Oct. 30.-ls Secretar,
Houston trying TO make a bond profit
eer out Of the Federal Treasury ask,
the Republican Publicity Association
through il president, Hon Jonathan
Bourne, Jr., as follows:
Before the convention OF IN,
American Bankers Association il
Washington Secretary Of the Treasury
Houston strongly opposed the sugges-
tion that Liberty Bonds be refunded at
higher rate Of interest in order to
bring them back TO par He even went
so far as to characterize the plan as
bonus proposal for capital. In
spite Of the fact that people were urg-
ed TO buy Liberty Bonds on the assur-
ance that they were even better than
currency, and in spite Of the further
fact that il is due largely to the inter
ference Of a branch Of the Treasury,
the Federal Reserve System, that the
market prices Of those securities have
been reduced below par, we find the
chief Of that department Of the Gov
.ernment protesting against a restora-
tion of their true value because it
would be bonus to capital.
"In the first place, the refunding Of
Liberty Bonds at higher rate of in
terest would put no additional expense
whatever upon the Treasury, provid
ing the refunding issues were in the
snape Of serial bonds In the second
place. why is not capital entitled to
the increased revenue and the inereas-
ed value which such a refunding would
produce? It is probably true that
Liberty Bonds today are held by only
about half the number who originally
purchased them. Probably even Sec
retary Houston would not contend that
those who have kept their first pur-
chases are not entitled to their full
value, hence his remarks about a
bonus to capital may be considered as
directed at those who have been pur-
chasing bonds in the open market and
at figure below par.
But why should capitalists Of that
class be subjected TO discrimination
They were the only recourse for the
individual bondholders who were en-
couraged by the Treasury to subscribe
o.. n, ha.,la tka., shaxs nrstl1 al
timately pay for The Federal Re-
serve Board brought pressure to bear
upon banks carrying loans for such
and il was necessary for
{ EN- to sell their partially paid up
bonds. Again, many small bond hold !
crs have been compelled to realize
money for emergencies and their bonds
have been sold. II is no fault OF the
sellers or Of the buyers that full face
value was not paid for them. II was
he fault rather of the Treasury in
floating the bonds in the first instance,
and in regulating transactions in them
iftcr they had been absorbed that de-
oreciated the price. Surely Mr.. Hous-
.ons capitalists en- not be blamed
'or the reduction in value, nor can
hey be equitably denied any apprecia
ion Of that value that may come in
.ce future II il had not been for
.hese C; pitalists' who purchased the
bends at even deprecated price, the
value Of bonds would have gone still
over In this connection il may be
iddei that in recent weeks there has
Dcon a very marked re-absorption Of
Liberty Bonds BY the general public,
i factor that has contributed to the
..sc in market price.
What sort Of ethics is il that urges
very citizen TO buy bonds until il
iurts, paying full value therefor, then
axes measures that bring about a de-
probation Of 10 to 10 per cent in price,
al then refuses 70 adopt a remedy
hat viii repair the damage without
.ost 70 The Government Under The
sinking fund the Treasury Is huyirg
,onds IN the market 70 the amount of
.bost S25OO00000 a year. j. il p1--
lille that Mr. Houston wants 20 keep
ne bonds down 80 that the UniUi
States Treasury can make a profit o.
he transaction selling al 100 ali
luying back a s. or s02 Such a
.-act.ce would seem 10 bring 3 very
ltcided boHus 70 the Treasury. which
,as never been considered as a money
making institution at the expense q
he public, but merely as the peoples
gent in handling funds FOR The uD-