Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1921-02-11
BONDS.

Professor Joseph French johnson.
an economist in New York university,
has been widely quoted as advocating
the burning of Liberty bonds as one
of the means of ne%utralizing the eff
fects of war. Details nave been sup
piled by the various commentators.
The general Interpretation placed or
the. alleged recommendation runs
about like this:
The bonds are in the hands OF the
people. In order to pay current In
terest on the bonds and retire them
when due the government will have
to tax the people. The process will
merely be that of taking money out of
n pocket and putting it into anoth-
er, and in the meantime there will
be a vast administrative expense, and
large sums of money will be tied up
for varying periods. All of this could
be avoided by the destruction of the
bonds, and the consequent reduction
of interest payments.
Discussion of the attitude of Pro-
lessor johnson on his subject may
be omitted, for the sufficient reason
that he did not make the recommen-
dation attributed to him. He ex-
plains that two years ago he made
a statement deploring the then ex-
listing tendency to use these bonds
as money, and to spend thtir value
in various eXtravagances. He said
that this practice would inevitably
increase initiation still further, there
by placing additional burdens on the
people in the shape OF increased liv-
ing costs. and resulting in sharper
reaction when the wave of extrava-
gance had passed. He said that
rather tina continue this process it
would be better for the bonds to be
burned in a Fourth of July bonfire.
A short time ago he delivered an
address in New York on the present
financial situation, and at the close
he was interviewed by two reporters
for New York papers. In the con-
versation he referred to his remark
OF two years ago in order to. illustrate
a point, but emphasized the fact that
the conditions had changed entirely,
that bonds were no longer. being used
as money, and that the process of re-
adjustment was well under way. In
fortunately one of the reporters got
the facts confused, and understood
the professor to be now recommend
ing that which he had never recon-
mended at all, but which he had re-
fcrred to two years ago in a pictur-
nsque manner for purposes Of illus
ration. The next mornings paper
carried the statement that Professor
johnson now wanted a big bonfire of
bonds.
Aside from the fact that a reporter
even on a New York paper-got
things tangled up, the subject has an
economic feature to which some at
tention has been devoted IL the dis
c%ussions. Broadly speaking, the can
collation. Of the bonds, which is inn
possible and unthinkable, would make
little difference to the country at large.
That Jig, money must be collected
from the people to redeem the bonds
which are in the handa of the people.
and when the process issecompIeted.
I there VIII be Just aslmuci money III
rst1le country as before and no mors.
II would, however. make vast diff
ference to . lot OF people who are
u the country. Come bought bonds.
and some did not. Some kept their
bonds. and some sold them and spent
the money. Those 49, havs bonds.
has paid money for them. They are
entitled to the full yaIue OF their
bohds. and viii receive II. Those
tho haye not bonds mpse help 10 ~;