Evening star., 1924-06-29
$457,O)0,0DO GAIN
Nu|bERTY VALUES
Government Bonds Score
Amazing Advances in Mar
ket UpsWing.
RISE OVER 20 PER CENT
Average of $29 Increase on Each
$1,000 Made Within
Year 1924.
RISE OVER 20 PER CENT
ny HARDEN CoLFAx.

Twelve billion dollars worth of out
standing liberty bonds, owned. 1t is
believed, by not less than 100000
firms and individuals, have climbed
within the past few days to the high
est value attained since they were
issued, from six to seven years ago
Within the year 1924 the market
value of outstanding liberty bonds
has increased by approximately S457,-
600. 900. On the average each $1,000
bond has increased in value by ap-
proximately s29.
From the lowest quotations at
which the bonds were sold. back in
1920 and 1921, the increase in market
value of outstanding liberties has
been phenomenal. They have risen
almost S3.000,000,000 above the lowest
level The rise amounts to slightly
more than 20 per cent, or one-fifth of
par, and is almost 25 per cent, or one
fourth more than the bonds would
have fetched had they been sold at
the lowest market values from three
TO four years ago.
Holders Reap Harvest.
Persons who have held these bonds
have reaped the benefit of the in
crease as in few other cases of gilt
edge securities. For the most part it
is believed the banks are the chief
holders. individuals who bought then
when iSsued-and more than $4,000,
600 subscriptions were received-have
generally sold them at a loss. They
bought at par and sold a prices be-
low par when conditions of the money
market and the business depression
combined to carry the bonds to low
values.
When liberties sagged down into
the low eighties the banks came by
the hundred into the bond market
and purchased the bonds which indi-
viduals were compelled to SELL So
also did wealthy men and women.
Those who bought today have the
satisfaction of seeing the securities
approximately one-fourth higher than
they were at the time they bought.
They are the chief ones who have
protited by the increase.
One Issue m Exception.
While most of the liberty issues
have touched their highest point
within the present month, a notable
exception is found in the case of the
first liberties. They are selling to-
day at approximately 101.1, but in
October, 1922. they sold up to 1881.
The reason for the decline from the
>
while all other issues are climbing,
is found in the interest rate and tax
exempt feature of the issue.
These bonds pay only 31a per cent
interest. but the interest on them was
exempt from federal income and pro-
fits taxes. The other issues pay high
er interest rates, but are only par
TALLY exempt from such taxation. In
the meantime Congress has enacted a
new tax law with lower surtaX rates.
as We'll as lower normal rates. In the
light of the new law, the first liber-
ties are not regarded by investors as
being quite so desirable for income
tax purposes as they were two years
age.
First Liberty As Loan.
The greatest rise in values during
the present year has occurred in the
case of the so-called first liberty As.
These bonds were issued in exchange
for first liberty 8 312s. They carry a
higher interest rate, but not a full
exemption from tax. Only a relative
" small amount of this issue is out
standing, according to Secretary Mel
lon, whose annual report for the past
fiscal year placed the total then at
about s10,0O0.000. par value. They
have risen during the present year
from 9S-3 to 102, an increase of 81
points.
liberty AZ and fourth liberty bonds,
also paying AZ per cent interest. The
first issue has outstanding at the
present time about $500, 10000 worth
par value; the latter was the biggest
of all the liberty issues. There were
outstanding at the close of the past
fiscal year. Secretary Mellon states
se532S, 100000 in fourth liberty bonds
On each of these two issues, market
values are today 33 points higher
than they were during the early
months of the year. This means an
increase in value this year of s225,-
100000.
rrE Lowest Quotations Cited.
Second liberty As have gone up &c
points within the year. increasing
their total valuation by about ST..
100000, there being only small
amount ts42,000,Oo0) outstanding Sec
ond liberty Ans, with $3,15S, 600, ,O0o
par value outstanding, have risen 81
points, or, all told. about sS52O0. 900
The third liberty loan issue, s3,4O7,.
100000 outstanding, par value, has
risen points. or for a total OF
about S102,000,000 since last January
But to measure the full rise in the
market value of these bonds on.
must go back to their lowest selling
prices. Except for the first liberties
they all touched their lowest in 1920
Here is the story of their rise: