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Show I DEPRECIATION IN BONDS Rejecting the suggestion that Liberty bonds be accepted in payment pay-ment of income taxes, the assistant secretary of the "United States treasury has made this explanation: The government's necessities are so urgent that tho whole amount of its revenues must be applied to meet its current disbursements, dis-bursements, including, if possible, the reduction of its floating debt. To accept payment of even 10 per cent of the taxes in Liberty bonds would add to the government's financial burdens and tho difference would have to be made up by additions to floating debt, an operation which could not in the end benefit the outstanding bonds. After all, the thing which will most benefit the market for Liberty bonds is the retirement of the floating debt. The suggestion would reverse this prooess and in effect convert funded debt into floating. debt. "I may add that (Liberty bonds are widely distributed among persons per-sons of small means, who are not themselves heavy taxpayers, and are not so largely held by corporations and persons of great wealth. A provision at this time permitting them to be accepted in payment of taxes would, under these circumstances, result in making it possible for corporations and wealthy persons by buying Liberty bonds in the market at a discount and turning them into the government at a profit. It would not correspondingly benefit the great majority of holders of Liberty bonds. "The present depreciation of Liberty bonds is largely due to the reaction which people underwent after armistice day and the tendency to treat them as spending money for current purposes. This is a tendency which the government should discourage, not encourage." Government bonds are selling at a heavy discount. On some issues the loss is $18 on each $100 bond. But how to overcome this depreciation is' a vexatious problem so long as the people generally continue to pour their bonds on the' market at the rate of millions of dollars daily. The bonds, which in a measure represent the savings of two years, have become incentives to unusual spending. Tho Victory bonds today are a most inviting investment. Quoted at 95, the 4 3-4's, which are redeemable in May, 1923, will bring a, return of about 7 per cent on the investment. As an Ogden banker has romarked, the "Victory 4 3-4 's are almost equivalent to United State Currency. ' Tho American homes should continue to apply the rules of thrift which impelled thorn during 1917 and 1918 to save and buy bonds. Now they should learn to hold on to their savings in the form o bonds. |