INVESTMENT: Boom in Savings Bonds

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When it comes to buying U.S. savings bonds, patriotism has not paid —until recently. One of the Government's highest economic policymakers was asked not long ago by the Treasury to urge the public to buy bonds; he refused, on grounds that the 5.5% interest rate did not keep up with inflation. In sum, bond buyers actually lost money. Realizing this, Americans long redeemed their old bonds faster than they bought new ones.

Now, in an unexpected turnabout, the Treasury Department reports that savings bonds are selling better than they have since 1945. This year's sales seem sure to top $5.5 billion, well over the $4.8 billion projected last January and the $4.7 billion sold last year.

To many people, the bonds at present appear to be as sound an investment as any in the land. The stock market has been sluggish; the glitter of go-go mutual funds has long gone; bank interest rates on ordinary passbook savings accounts have been at 5% or lower. If the President's freeze cools inflation, the savings bond rates will look even better. Insecure about the future, many small investors—particularly middle-aged blue collar workers—are seeking financial refuge in the Government's securities.