Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1921-05-17
uurr TIE souHD asCUernns

The pseple Of North Dakota are beinx urrAd ~ the
members Of the Industrial Conszaiaaon to borrow on their
life insurance ana TO sell their government bonds and to
invest the proceeds In state Industrial honda. The Herald
has already commented on the insurance feature, and at
this time Wishes to reiterats It's conviction that whatever
may Be the situation in the case OF 4 particular pxiyAts
individual, the senesal policy urged OF borrowing On life
insurance for investment OF this character IL utterly I'M
visa and misehisvous. The anne thing is true OF selling
government bonds for this purpose. The Two classes Of
assets, Insurance equities ana government bonds. usually
represent savings accumulated little BY little, laid away
for q rainy day or for the protection OF the .bersaved
after the death Of the bread~tnnsr. In no ease other than
that Of absolute necessity should these asDets be Aeri-
need Or turned INTO others Of lsn value ana asailabtlity.
A life insurance policy il something upon which
money can be raised 1t any time on short notice, but 1t
has not been acquired for this purpose. The insurance
premiums have been paid in order to gather. an accumu-
lation little by little which shall serve as 4 protection
IN trne Of need. 1t is not a speculative venture nor an
investment Of the ordinary class. Government: bonds are
marketable alwsys, but ct Z very decided discount 1t the
present time The man who sells his 500 bond for $50
II sacrificing SO OF his capital. He ntSd not do 20, and
II he retains hts HOLDINGS he will reeetve his 500 TO the
last cent when the bond natures. He need have no IN
terest IN the ups and downs of the market. All that is
necessary for him Is to lock up his bond in a safe place.
cash his coupons az they become due. and hold the bond
itself until maturity. He will then be paid its full value,
And whether in the meantime it sells above par or below
par need not concern him.
The securities offered by the state are not or equal
availability. No matter hov regularly they are issued or
now certain the state u ultimately to redeem them, they
have no present market value and the purchaser II COM
PEELED to realize on them IN the meantime may be obliged
to accept q considerable loss. There Is an element Of
uncertainty In the situation which makes these securities
no fair substitute for the ones which he is invited to
relinduish. Where the individual has money which he
lie able TO invest and which ne will not need for an In
definite time, the situation is entirely different. The bonds
sold by the RAte Of North Dakota will be redeemed; but
with the Standardization OF its affairs in the hands which
control it 1T present the time of redemption is indefinite.
The money Of the state Il being squandered, and its ability
70 pay Is being diminished. 1t will be necessary before
nn, NAaA~ q Il NAnkAdered deairah1A Hoesseitu "a rlace
&c have in charge Of the business Affairs Of the state
man who are thoroughly committed to the policy Of keep
ing. down the states expenses, Of preventing waste, of
building up our assets to the point where there will be
no question a. to the meeting Of every obliEaticn as it
natures. '6