New-York tribune., 1920-04-20
Houston Opposes
Fl Frelinghuysen's
Liberty Bond Bill
No Solution Offered for De-
probation by Fifty.Year
Loan Plan, He Says; Buy
ers Not Entitled to Gifts
From The Trioune's Washington Burecu

From The Tribunes Washineton Burecu
WASHINGTON, April 19-Secretary
of the Treasury Houston, in a letter re-
ceived to-day by Senator Frelinphuy-
sen, OF New Jersey, opposed making
any changes in Liberty bond legisla-
tion. Senator Frelinghuysen had writ
ten to the Secretary and asked his
opinlon regarding the Frelinghuysen
olil proposing that all Liberty bonds
oe refunded into one consolidated loan
OF $4,000, 100000, maturing in fifty
years, bearing 81 per cent interest
ana carrying virtually complete ex.
emption from taxation.
~ !; my considered Judgment that
the bill offers no satisfactory solution
OF the problem Of the present deprecia-
ton in prices Of Liberty bonds and
that 1t should not be enacted" said
Secretary Houston.
In the first place, the Secretary said.
ene total face amount Of the first, Sec
ond, third and fourth Liberty loans
outstanding on March 81. was onlv
sl5,el6,S72, ,o3S-a little over half the the
amount proposed by Senator Frelinp-
huysen. Seca9d. he considers It neither
necessary nor desirable to attempt to
consolidate the outstanding bonds into
one loan, because the government can
retire bonds more conveniently by
spreading maturities over period ~
years.
The Treasury is also definitely op-
posed to the issue of further oblira-
tlons bearing full exemption from
.aSaNcn' said Secretary Houston.
Inc chief objection to total exemp-
ton is that its value depends largely
on the wealth Of the individual investo,
and IS greatest in the case of the
wealthlest investors. Such exemption
from taxation, moreover, would ma
terlally cut the revenues Of the govern
ment, at time when it cannot afford
to dispense with any receipts which
would otherwise accrue on account Of
taxes" "
;. The Secretary adds: 81 do not be-
neve that your bill offers any real So
!utlon OF the problem Of the prices of
Liberty bonds. AS the Treasury views
chiefly to the fact that of the 30 600 =
ooo Americans who patriotically sub
scrloed during the war, large numbers
nav not been willing or able to ex-
ere such control over their personal
eNl lures as would enable them TO
ret their bonds after the cessation
OF hostilities. Liberty bonds. like
others, are subject to market influences.
lnciuolhg the lack of supply and de-
- anu oHu ]Helr market quotations have
oeclined IN consequence of the failure
OF the great investing public to save
IN proportion to the enormous expend;-
ture of capital during and since the
war. A~
The present prices of Liberty bonds
are causing no loss to real investors
VINO are holding their bonds as per-
manenc Investments; they are not suf-
fering because others see fit to sell
their bonds now for less than thev
are worth, and neither these investor,
nor those who wish to sell their bonds
have any ground for expecting do
nation from the United States in the
form Of additional tax exemptions or
other privileges. To make valuable
gifts to the people who subscribed for
their bonds on definite terms. for !.
, Definite period, would, in my opinion.
De suoversive of all decent principle,
of government.
AS you doubtless know, the govern
ment is already doing everything in it's
power to, protect the market for Lib
erty bonds and the interests Of Liberty
pond holders by means of purchases
Tor the per cent bond purchase fund
provided by existing law.
10 November 80 last, as shown bv
Secretary Glass's report, S1,O43.o8O .5Oo
principal amount Of Liberty bond, hsd
been purchased, the principal amount
paid therefor. being 999,363,52e.15."