, 1921-11-12
,,nrRrY, BONDS CLIMBING

- credit the Republican admin
.-.io, with all of the improved price =" -
-, hut undoubtedly the better JUSTICES ~.
81 sounder business principles OF -
--a.srt regime are responsible to large ~
pfsNsue". IDS hack to a value nearer the original IN
vestment. no.rat;c policy
--a,.od the market value of Liberty BONDS. Inc
e., and most effective of these was the aee'n
Wr,,r administration in urging banks to ihsis' 'A'
bonds left with them as security De n - =.
owners and the amounts due promptly pAu. 80
owners of bonds thus left in banks as security ~"
no. in a position to pay the amount due n me- ne,
fore. they sold the bonds at the best price 'a
he obtained. With bonds thus crowded upon III $50"
bet the inevitable result was depression.
Ther too. the Wilson administration was conduet
IN, the affairs Of the government on an extraVAsa"'
and wasteful plan. 1t was only by most ufa'ss -
ures that the Republican congress was aoi " w.
the administration to begin disbanding is vi ofsAn
;,ations. Continued enormous expenditures ha'ufa
" made government securities less Desirable just !"
excessive expenditures as compared with income
makes the credit of any government or any Dusihe'
institution of lower value in the markets.
Moreover. continuation of large government eHpeh-
d;tures meant continued high taxes for a longer pc
Rod Of time, and, in an effort to escape the Ne''
,,.rv NJ the larger investors were disposing OF secu-
rites the income from which could be taxed, ana "ele
Investing in non-taxable MUNICIPAL ponos. WIN Ne
large market for Liberty bonds closed, there was natu-
rally less demand and a lower price for the Lioerties'
Again, the Democratic administration was commit
ted to a policy socialistic in character. 1t lfTored an
extension of the time of government OF a lion OF the
railroads, with the almost certain adoption Of govern
ment ownership under the Plumb plan, which would
have caused the issuance Of some 100000 o0,o
more of government bonds and the further depression
of bonds previously issued.
All these influences tended to discourage either tbs
holding of Liberty bonds already owned, or the pur
chase of additional bonds as an investment. But thu
situation was changed by the election Of a Repub
lican administration.
As soon as it became certain that the wasteful ant
socialistic administration would come to an end, Their
wa. a revival of confidence in the future of govern
ment credit and government securities. The Repub
lican administration has not only made large cuts il
government expenses but it has definitely gone Of
record as opposed to involving the government il
country has been promised more business in govern
ment and less government in business. Although tn
process of reducing taxes must be slow, it has CON
menced and will be continued as rapidly as retrencf
ment in expenses can make possible. Investors in sc
curities realize the Importance Of the changes in go,
ernmental policy, and their confidence in the preser
management of public business is reflected in tn
higher prices they are willing to pay for bonds. Their
is naturally a reflection Of this movement in tn
prices obtainable for securities other than those
the United States.