The Bingham County news. [volume] (Blackfoot, Idaho) 1918-1930, 1923-06-01
FEDERAL BANK
GOVERNOR ON
GIGANTIC LOAN
Analyses Remarkable Features of
Worlds Greatest Single Obligation.
approximately 80 Per Cent Repaid
by u. s. Before It Was Due.

(Written for The San Francisco
Chronicle by John U. Calkins, Cover
nor of Federal Reserve Bank of San
Francisco.)
Yesterday, May 20, 1923, marked a
signal event in the fiscal record OF
our country.
1t was the final settlement or ma
turity date Of the most gigantic obli-
cation which has ever matured In
the worlds history-the great Vic
tory Liberty Loan offering by the
United States government during the
Spring Of 1919. This was issued in the
shape Of four year Victory notes, ag-
gregating the stupendous sum of four
and one-half billions Of dollars gold,
about four-fifths of which drew inter-
est at the rate of Az per cent per
annum, compounded, semi annually,
and the remainder at 3E per cent.
The two most remarkable features
Of this monumental piece of Govern
ment financing were: First, the loan
was nearly II per cent oversubscrib-
ed by the American public during the
three weeks-April 81 to May 10
which compromised the sales period
commonly known as the Fifth Liber-
ty loan campaign, and, second, this
last Of our great war loans was ap-
proximately 80 per cent repaid by the
Government to subscribers consider
ably before the money was due and
payable.
In short, of the $4,495, ,374, 300 Of
Victory notes issued, only the COM
paratively small sum of about $780,
100000 were still outstanding after
surrenders in response to the Treas
ury's calls for redemption Of the 3%
per cent notes on June Is, 1922, and
the Az per cent notes CA to F in
clusive) on December Is, 1922 The
great bulk of the Victory loan, there
fore, was retired before maturity
through cashing or refunding oper-
ations and by purchases in the open
market where these securities had |
to take their proper place, and like
other securities be subject to the law |
of supply and demand.
The significant thing that this tru-
ly remarkable, achievement empha-
sizes is the unquestioned value Of
United States Government securities
because of the absolute safety of both
principal and Interest which have al
ways been regularly and promptly
paid in full when due-and even be-
fore due, as has been so magnificent
ly demonstrated through the expedit-
Ious settlement of the entire Victory
loan issue.
1t Is well recognized that industry, '
safe savings and sound investment l
'orm the basic support and secure 6
foundation of the business life Of both I
he individual and state. Therefore t
he interests Of our vast army Of t
mall savers are very properly a mat '
er Of vital concern to our national t
Government. Millions Of dollars of l.
heir hard-earned money are wasted t
md lost annually in "get-rich-quick" C
chemes. People are generally i'm +
erfectly informed on investment mat p
ers and the lure of unusually large t;
eturns frequently results 1h their L
,eing yictlmized. Much money Is o
lso boarded, hidden or kept In In n
ecure places and therefore fails to n
erform its function through being t'
nus withheld from circulation. II
The Government is particularly de- p
irous, therefore, Of getting as much m
8 possible of the money comming fo
ack to the holders of redeemed Vic
Dry notes reinvested through pur-
base of the 1923 issue Of Treasury
avings Certificates, which mature in
We years from the date purchased til
nd yield per cent interest, COM re
ounded semi-annually. They are II
zee from all State and local taxation m
except estate and Inheritance taxes) co
Id the normal Federal income tax. w
Treasury savings certificates can be at
ought at all money-order postoffice 1t
/, in denominations Of $25 (for $20.- ma
y, 500 (for $S2) and $1,000 (for at