The Bridgeport evening farmer., 1917-11-19
LIBERTY BOND
LESSONS
BY HOWARD sPEER
OF Hincks Eros. 8 Co.
ARTICLE NO. 4
More About Conversion
NO. 4
More About Conversion

There are two matters that ought
to be cleared up before we go with
these lessons, as it is evident from
questions put to the writer that mis-
understanding exists.
The first thing is that these articles
are written primarily for the individ-
ual holder of Liberty bonds, not for
the corporation. 1t is from the point
of view of the individual that the dis
cussion is carried on and the conclu-
stons drawn. Later on>we shall prob
ably have occasion to look at the sub
ject from the corporations point of
view J
The second misunderstanding con-
Germs the time limitEwithin which one
may convert his 8 1-2 per cent bond
into 4 per cent. bond. Let 1t be
clearly understood that you have un-
til and including May Is, 1918 to ex-
ercise this Privilege.
Many people have thought that the
notice they received from their bank
meant that they had to convert before
Nov. Is, 1917. This latter date was
simply the date upon which CONVEX
sions could have been made without
any adjustment of interest There
will be another such date on Dec. Is,
1917.
The words adjustment of interest
will be explained in due time. In the
meantime just remember that there is
no hurry about converting Read these
articles and be perfectly sure you un-
derstand what you are doing before
you take any step with your Liberty
Bond
Now to get back to the point where
we left off last Friday You have
seen how free from taxation the 1-2
per cent. bonds are. But let us look
now at the 4 per cent. bonds Of the
Second Liberty Loan and see what
they have to say on this important
subject. The bond reads:
This bond is issued pursuant to
Treasury Department Circular No 80,
dated October 1887, to which refer
ence is hereby made for a statement
of the rights Of holders Of bonds of
said series with respect to exemption
from certain taxes"
(The writer knows Of one man who
won't buy any bonds that have ever
been folded, because they won't lie
out flat in his safe deposit box; an
other man has said he prefers the
1-2 per cent. Liberty Bond because
it says right on its face exactly what 1t
means about taxation while the 4 per
cent. bond just hints at it and then
refers him to a circularl Well, it takes
all kinds of people to make a world,
as you may have noticed!)
But, anyhow, this is what that cir
cular No. 80 says:
'.The bonds shall be exempt both
as to principal and interest from all
taxation now or hereafter imposed by
the United States, any state, or any
of the possessions of the United
| tfo% ~
ity, except (a) estate or inheritance
taxes, and (b) graduated additional
income taxes, commonly known as
surfaces, and excess profits and war
profits taxes, now or hereafter inn.
posed by the United States upon the
income or profits of individuals, part
nerships, associations or corporations.
The interest on an amount of bonds
and certificates authorized by said
| act, the principal of which does not
exceed in the aggregate $1,000, own
ed by any Individual, partnership, as
ISOLATION, or corporation, shall be ex-
empt from the taxes provided for in
clause (b) above
Now if you will compare that state
ment with the reading on the 8 1-2
per cent. bond given in the last les
son you will see that they are identical
in meaning until you reach that clause
B,
And that clause B and the sentence
following it are enough to take your
breath away, They, have all the ear
marks of those long sentences full OF
big words that the lawyers and pro-
fessors love to conceal their thoughts
in when they are talking to US ordin-
airy folks.
But don't let it brighten you. For
in plain English the most important
part of its meaning is that unless
your yearly income is more than S.
600, you won't be taxed on your per
cent. Liberty Bonds. It has other
meanings and they will be explained
to you. But the chief thing for you
to be thinking about between now and
the next lesson is that 3 IL per cent.
Liberty Bonds can't be taxed and the
4 per cent. bonds can. Never mind
for the moment whether or not this
affects you directly. Just remember
that it does affect somebody.
And somehow or other the thing
that affects the other fellow, pleas
antly or unp1easantly, joyfully or sor-
of getting around to us sooner or lat
er. Many people are saying that one
of the blessings in disguise that is go
ing to descend, on US out of this war
will be a better understanding of each
others problems. Perhaps the Liberty
Bond is going to help in that under
standing. We shall see.