Detroit evening times. (Detroit, Mich) 1921-1958, 1942-01-26
Money Put
In Safety Box
Is Like Junk
Similar 10 Raven Saving
of Useless Trinkets
By HUGH s. JOHNSON

I KNOW people-not a few
Il who have been changing their
bank accounts into paper cur
rency and putting the dough into
Safe-deposit boxes.
Figures on the extent 10 which
this has gone on are not COM
plete and are very indefinite,
but the indications of money
withdrawn from circulation"
show that il is not insignificant.
When asked how come and
why don't you put it into govern
ment war securities ?" the an
swer always is:
"If worse comes 10 worst the
market value Of government
bonds will melt away. The banks
have so much invested In these
securities that they will he un-
able to pay their depOsitOrs. 1
my family Oft the bread-lines."
This is as absurd as even the
ravens foolish hoard Of tinScl
and other bits of bright but use
less junk,
TT USED 10 be one way OF
escape when most American
paper money was redeemahle IN
gold. and its bonds had 10 be
paid in gold. That was before
this administration Sequestered
all the gold withdrew il from
circulation. and made all its out
standing obligations payable only
in exactly the same kind OF
green paper that these hOarders
are fguratively putting in a
sock.
This government cant allow
the banks 10 break II any such
decline in the market value of
government bonds were threat
ened, the government would
simply make them payable in
par in the same kind of paper
money which is the only kind
We have. They are already
good as collateral for loans up
10 par 100 cents on the dollar.
II is true that they pay a
very low rate Of interest. hut
when the holder Of these gov
eminent bonds decides that he
wants 10 sell them or have his
government redeem them. the
answer will be:
sure we will pay YOU par for
them. IL will be I'm paper
money. The only difference IL
that il bears no interest at all
and II has no greater security
than your bond. Would YOU
rather have government paper
bearing no interest Currency
! or your interest bearing bonds ."
Nobody but zanie could hesi-
| tate over that choice. For that
reason there will be no selling
raid depressing the value of gov
eminent securities below par.
OF course the government
can not afford 10 have any new
orgy Of closing banks Part Of
the security against that Is also
/ IFS almost unlimited power over
the value of money and the
privilege, already discussed, Of
making all the bonds held by
the banks rcdeemable at par.
THUS n situation IS already
created where the boarding
OF paper currency doesn't make
sense 4 safer and more thrifty
way 10 use private money which
IS not immediately needed in
business or other enterprise is
10 buy these government Sc
: CuTitieS.
Nearly all the old lodges and
escapes from initiation are closed
and sealed. One was 10 buy real
estate, commodities or common
stocks with the idea that. as the
value of money declined, the
price of these would go soaring
You could sell out at the peak
and save your fortune in your
profits
Now most commodities are
subject 10 consumption, and fair
compensation" which must be
paid is pretty likely TO yield nc
great profit.
Furthermore, as 10 both COM
mon stocks and commodities. We
are weaving a tax net around
profits. If inordinate gains are
made in this way the govern.
mcnt is likely TO take most OF
all of them.
Finally. real estate is just a
target for local taxation. Those
taxes have to be paid in cash
on the barrelhead. II they ar,
not paid. due 10 mounting taxes
and declining business, there i;
tax sale and you lose il all.
My conclusion from all this
Is that there are no clever little
schemes 10 avoid the burden oi
this war and that the safest
, course TO invest surplus money
. is I'm government securities.
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