Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-06-15

situation SHOWS that mucn progress
has been made since the armistice IN
pairing down the public debt. The
| peak of the debt was reached on Au-
gust 81, 1919, when it stood at
500. 500, 100000, which is equivalent to
1895 for every man, woman and child
in the United States. On March 81,
eminent financial statement was is
sued. the debt stood at $23,145, OOO,O o
or S3,451, O0O. 900 less than the peak
That means that every person in the
United States has paid off $34 of his
indebtedness incurred on account OF the
war. Everyone still owes 1921.
Many persons who owned Liberty
bonds have felt some resentment
against the government in the last two
! years because of the deprecated mar
ket value of these securities. Attacks
have been made on the treasury, it be-
ing claimed that it was unfair for the
government to sell bonds to the public
and permit them to depreciate in value.
A more careful examination of the
merits of the situation will reveal that
this complaint is not well founded.
Why Bonds DEPRECATED
In a bargain made between the gov
eminent and the bond buyer-a bar
gain which was made to win the war
! the bond buyer and not the government
is the one who has broken the contract.
The government said, Lend mt 500
for 10 years If the government pays
back that 500 at the end of 10 years,
its part of the bargain has not been
broken. And in addition, it has paid
interest regularly. But in many cases
the bond buyer has said: II want my
money back. / didn't really mean you
could keep it for 10 years whether
there was a war or not" So this bond
buyer has sold his bond. Many did
this. which as a matter of course re-
suited in a lower price in the open
market for the bonds. The market price
has nothing to do with the original bar
gain between the government and the
bond buyer.
Despite the fact that the prices of
some issues sagged because the holders
asked for their money back, bond prices
are all on the upgrade and will con-
above par-that is, above the face
value. People will pay a premium for
the privilege of being a creditor of
the government and receiving the in
terest which is paid.
The lowest point reached on the
war loan was a price of S1.40 for the
Fourth Liberty loan on May 80, 1920.
The highest price so far was paid on
August 81. 191S--102. 30 for the First
Liberty loan. Since the armistice all
issues have been below par and some
of the issues more than Is points be-
low but now half of the issues are at
100 or above and all are within two or
three points of par. The recovery has
been extremely rapid and is regarded
as IN indication of the sound condition
of the United States treasury and the
general prosperity of the country.
The treasury has benefited to some
extent by the breaking of the bargain
by the bondholders who sold their
bonds. 1t has bought back bonds at
prices below their face. Thus. under
the sinking fund provisions of the law,
the treasury had purchased UP to the
date of the last report of the secretary
of the treasury bonds of a face value
of S154 900 at a market cost of
but $146.9S9.976. Under q special
bond repurchase provision, additional
purchases have been made of bonds
to a face value of ~S70.375,3O at a
market. cost of S69,331S,257.
In comparison with wealth and pop
~ulation, the American treasury is in
far better condition than that of n
nation in the world and while the
treasury will have to be skillful in
handling the $1,000, 600, 900 financing
job of the next II months. there is
no doubt that the work will be accom-
plished.