The Birmingham age-herald., 1917-06-17
NEEDED ON LIBERTY BONDS Subscriptions by the Banks Must Be Absorbed GOOD WORK WAS DONE Wall Street Feels That the Next Loan Must Bear Higher
 Interest Rate Than 3K
 Per Cent
GOOD WORK WAS DONE

New York. June 16. = Especially Wall street is busy analyzing the lib- erty loan returns now coming in through the 12 federal reserve bank districts, and already two very inn portant points have been settled re- garding the next offering, which will probably be early in September. First if the next loan is to be a success the interest rate must be raised; then, q countrywide campaign of education must be conducted to teach the big $100, $500 and 5000 bonds The lib- erty bonds are also in denominations of $5000, $10,0O0, $50,0OO and $10O, 900; but the returns at hand show that ths great need for detailed information about bond investments is not for those who can command cash or credit to the amount of 5000 or upward.
 Those familiar with the countrys great resources predicted before the first subscription list was actually opened that all of the first installment of s2,000, 900, 900 liberty bonds would be sold. It is one thing, however, in floating new bond issue, to place the securities in the hands of indi- vidual investors, and quite another to find a temporary resting place for the bonds with the banks. That the banks have purchased more of the $2,000, OO0,- 900 liberty loan bonds than had been expected. is now a matter of record , and to that extent the offering was not success. The work of placing the bonds with investors must still be done. And in the meantime the banks are minus the resources needed to carry on their general business.
 Where one mistake was made in the first offering was in expecting that the public would take all of the S2,- 900, 100000 bonds Even in Germany where there is much better know ledge of investments and where public enthusiasm over the war ran highest in offering the government loans it was found necessary to do great deal of educational work. The first German war bonds offered in Septem- Der of 1914 found only 231, ,112 sub scrlbers Of $50 and under; for the sec ond loan, which was floated in March or 1915, there were 451,113 buyers of $5O bonds and under; for the third loan, in September of 1915, there were 9S4,35S; for the fourth, in March of 1916. there were 2.406,11S. That was the peak. The fifth loan brought on,y l,f94,OS4 subscribers to $50 bonds Or under Figures for the sixth German loan, brought out early this year, have not been publishe
 But the necessary educational work for our liberty loan offering is now being done. Every day information is being scattered broadcast to show how liberty loans can be bought outright or on the iEstallment plan in small denominations how the bonds can be converted into cash readily; how interest can be collected if the bonds are held.
 So much for that point settled by the detailed reports now coming to hand. Al for the next, the need of raising the in- terest rate: One reason for the disap- pointment over the number of small sub scribers to the first installment of the liberty loan bonds was due to the fact that the interest rate was only 31k per cent. Patro tism pure and simple sold the first g. 2.000000000 of the liberty loan, as far as the small buyer was concerned. h being tax exempt the first offering was attractive only to the man with large income. The next loan must be made attractive from the investment viewpoint to the little fellow
 When the little fellow through patri- otisml went to a bank to see if he could borrow money to buy a liberty loan bond, he learned that he was expected to pay per cent. The bond he wanted to buy brought in only 3la per cent interest, but the banker asked him for per cent interest. If he paid 1t, and his loan ran for a year, the actual return on the $50 or $100 invested in a bond would be per cent That has been the experience of many.
 Obviously, the government in borrow ing money must come nearer to the mar ket rate On finding out that he re- ceived only 31a per cent interest on his