Evening star., 1921-12-14
THRIFT BOND ISSUE
|. TO PAY WAR DEBTS
Government Wants Small In
vestors to Take New
Certificates.
BY DAVID LAWRENCE.


The far-reaching process of retir-
ing Americas war debts without de-
pending upon repayment from the al
lied countries has begun.
President Harding himself an
nounced the decision of the admin
istration to issue through the Treas
ury Department a new form Of in
yestment which Is designed especial
ly for the man and woman of small
income. After all the experience sof
the war with every kind Of security.
the goverIment-has at last evolved q
plan that win pay every purchaser
hof the new certificates $25 for every
$50 invested. 800 for every $50 and
lasi. geo for every $500 II not redeemed
in Eve years.
For the first time. too. the govern
ment guarantees a uniform income tr-
respective of the date or purchase or
market values. Thus II any certifi-
cate is redeemed before the five years
pass. the original $25 or $50 or $500,
as the case may be, is returned to
the purchaser, but with additional in
terest Of ~ per cent for the period
that the certificate has been held by
the investor.
Limited to 5000.
Absolutely no limit has been placed
by the government on the number of
certificates that will be issued to the
public as a whole, though an individ-
ual is limited to $4,000 worth. The
object is to prevent large banks and
trust companies from buying all the
certificates that the government may
issue. Furthermore. the government
intends to reach the persons of large
income by the issuance of another
type of Treasury certificate which
bears straight interest rate for
short periods like six months or three
years. The development of govern
| ment policy in this direction is to
be gradual. but for the moment the
plan is to concentrate on the small
investor and teach him the value OF
the new thrift idea.
The government will thus take care
of about $600.000.000 worth of 1918
Treasury certificates which mature
about a year hence, and to that extent
| the proceeds of the new security will
| be used in refunding. Five months later
three and half billions of victory loan
bonds will mature, but that's too big an
| issue to retire through small thrift GER
| tificates. Some new Treasury certificates
| of larger denomination will have to be
| issued, and these in turn may be retired
! through the smaller certificates. In other
words the refunding process is in an ex-
perimertal state and the Treasury will
know more about the best method of re-
| firing Americas debts after the new
; issue Of cetificates has been received by
! the general public.
! Small Investors Given Chance.
| No stunt campaign Of fashy tactics
will be used in selling the new certifi-
Gates, as the government is depending
upon tae press, the post offices and the
banks to let the small investor know
about the opportunity. A dignified effort
will be made by the Treasury Depart
ment to reach the small investor, and it
is felt by the government that at last a
security has been evolved which gives
the small fellow" as good a chance
as the big fellow" on attractive govern
ment securities.
| Oficials say there is no especial re-
| lationship between the announcement
| of the new issue of Treasury certiff-
Gates this week and the fact that
| victory bonds are back at their orig
| inal par value. But the fact Is the
Treasury has been working on the
| new plan ever since it was apparent
| that liberty bonds were starting
back to par. The pyschological
value, nevertheless, of announcing
| the new issue at the very moment
| when victory bonds touched par is
| appreciated. So many small in
| yestors bought liberty bonds with
ont knowing that market values
! could causS them to drop in price
| that the government~n now 1t benefited
! by beinE able to point to the par
| value of bonds as proof of the orig
! inal promises of the government
| Still the Treasury has had to take
into account that many investors, dis
appointed by their experience with
| liberty bonds. might be cold toward
government Investments unless given
an absolute guarantee of the PAL
| value of security. The new certifi-
Gates cannot fall in value. They are
redeemed whenever an investor needs
tmoney and he sustains no loss at all
| in fact, he collects interest besides
There is to be a continuous sale
4 moreover, of these certificates. The
date of purchase doesn't affect the
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