Alexandria gazette. [volume] (Alexandria, D.C.) 1834-1974, 1922-01-09
Rise in Liberty
Bond Prices Sign
of Return to Normally
Boston Post Sees Reason For Amer
lean People to Rejoice Over
Steady Advance of Securities
Issued to Finance War

"The steady and vigorous rise III
the prices of Liberty Bonds says
the Boston Post editorially, is de-
velopment that may well bring GLAD
ness to the hearts of the American
people, and for reasons entirely aside
from the mere appreciation IN the
market value CT their investments
Tor the rise in bond prices, thus re.
fleeing the drop in the price OF
money, is the most convincing evil
dence of the trend toward norma!cy;;
Zone hears good deal Of cynical
talk, however, about the advancing
bond prices. Now that the small
patriotic investor who paid par Tor
the bonds during the war has been
shaken out the 'bgi fellows arc put
ting the prices up, is common COM
ment by these cynics. This IS the
mercst drivel, not only not having any
basis in fact but in general is abso-
lutely contrary to the fact.
The bonds were bought by some
100000 investors, which virtually
meant the entire population able to
buy. They were issued by the Dill
lions because the Government which
means the people had to have the
funds to carry on the war. Every
banker in the country knew at the
time that there was no Investment &c
mand that could absorb these billions,
no matter what interest rate was
offered. Indeed if the interest rate
had ben placed much higher it would
have caused ali other securities to
tumble because the investors would
sell their corporation securities in or
der to buy the Government issues.
The result would have been terrible
financial panic.
$50 the bonds were bought for pa
triotic reasons mainly, the invest
mcnt consideration being secondary.
Now, with 20,000,000 holders, hun
dreds Of thousands Of whom were sure
to die each year, great many of the
bonds had to be thrown on the mar
ket and naturally the prices dropped.
Even after the war ended the prices
slipped down further. But instead
of the small investors being the vic
Tins, the fact is many OF the biggest
corporations in the country took losses.
Being unable to borrow more at the
hanks, these corporations during the
financial strain of 1920 had to sell
their Liberty bonds at practically The
lowest record prices. On the other
hand, bankers report that the buying
at the low prices was mainly by small!
investors, who averaged III this way
on their original purchases from the
Government.
Instead Of being 'skinncd,' The
small investor has quite generally
profitcd by the fluctuation in prices,
although, of course, there are in
Vulnerable cases where people of
small or moderate means had to sell
at less than they originally paid. But
and large, however, the loss incurred
in this way was n mere drop in the
bucket to the losses that our young
men suffered who left good jobs FOR
a year or two to join The Army az q
dollar day.
JAS compared to the financial Sacri-
fiecs made by tho people of othar coun-
tiles ours has been almost nothing;
for not only have the bonds Of other
nations declined more than OUTS but
even the very money OF the pcorIe has
deprecated, and in some Instances has
become virtually worthless"