The Bridgeport evening farmer., 1917-11-30
LIBERTY BOND
 LESSONS
By HOWARD STEER Of Hincks Bros. 6 Go.
Lesson No. 9.
Another Good Trump Gard.

in the midst of topic because the newspaper man was standing at our elbow crying for copy.
 You remember we were discussing the superior conversion privilege of 3h per cent. Liberty Bonds as com pared with that of the 4's
 Many people have thoroughly un- derstood the difference between the two privileges as outlined in the last lesson, but we have yet to meet any one who has noticed another appar. ently. innocent little difference, but one which may possibly prove it to be very important.
 The following is quoted, word for word, from the face of the 37s per cent. bonds. Certain words which have no bearing on the subject are omitted here for brevity's sake.
 e.. the holder hereof .. . shall have the privilege of converting this bond at par into an equal par amount of bonds bearing such higher rate of interest
 
 That is simple enough except that you may not be quite sure about the meaning of that word par" We'll, if you will put the words face value" in the places where the word "par'' appears you will get the exact mean ing. In other words, you may change $50 2h per cent. bond for a. $50 bond of the new kind, $1,0OO bond for $1,000 bond, and so on. It doesn't make any difference what the bonds are selling for in the market; it is just face value for face value. You won't have to pay anything ex- tra. You just trade Hends. The use of that word "par" in both places settles that You may have to make what is called 'an adjustment of in- terest" and as we promised once be- fore, we'll explain that phrase to you some day. While you are waiting for the explanation you may rest assured that 1t does not mean that you will lose any money by the operation Now let's turn to the United States Terasury Department official circular on the per cent. bonds. It reads: the holders of bonds of the present series shall have the priv llege of converting their bonds at par, into bonds bearing such higher rate of interest, at the issue price of bonds of such subsequent series not less than par ;"
 You see the difference, of course | But do you grasp the full signifi. canoe of it? That sentence mean! that you may exchange your 4 pe1 | cent. bond for the next one with g l higher interest rate provided VOL pay the difference between the fact | value of the new bond and sucf price, over par, as the government
 may fix as the selling price of tn, l issue.
 | Of course, if the new bonds are I sold at par, or face value, you won | nave to pay anything extra. And WI want to hasten to say that that i: l exactly what the government vii | probably do. It is not very apt to fi1 price of more than par for any new bonds 1t may wish to sell But ii can do so and the officials who drew up that circular doubtless had the possibility in mind or they would no I have worded 1t as they did. It would have been simpler to use the wordine | or the 3A's and so the mere fac, that they went out of their way tt change the wording and to put ir that phrase 'at the issue price' proves that they had, at least, con. sidered the possibility of a higher | price than par on some future issue
 Just to show you how possible such thing might be, look for . | moment at a somewhat similar thins | that Great Britain did in connection with her latest offering of bonds She I sold them last October, right in the midst of our Second Liberty Loar l campaign. She offered two kinds o. | nY1dc I,~
 ! per cent. bond and taxable. The | other was per cent. bond, free o1 tax, The price for either kind wa. | par, or face value, A $100 bond o1 | either kind was sold for $16o.. But one man gets per cent. on his mone3 while another gets only per cent True, the per cent. man doesn't pa, | tax while the per cent fellow does, and so the value of the tw, bonds is made fairly equal.
 | Now that is one way to even thing: up, namely, to sell two things of diff ferent value at the same price ant then give a special privilege to the thing with the lower value.
 l Would it have been any different | in principle if England had sold onl, one kind of bonds, say 5 per cent
 bonds, but had fixed two prices or them, price of par for the mar
 who wanted a green bond on whfcl
 he would have to pay a tax, and z
 price of something over par for tn, | man who wanted a red bond whicF would be free from tax?
 | Well, then, who can say that tn, United States may not do some sucl
 thing? Instead of adopting Eng
 lands method Uncle Sam may choos the one just mentioned. If he should
 do go then the holder of a 4 per cent
 Second Liberty Bond would have t, l pay something extra in order to ex
 change his bond for one of the "red' I ones that we have imagined as bein, sold.
 But a 3 A First Liberty Bond coult
 be changed into either a green O.
 a fred" bond without extra charge.
 Score one more for the First Lib
 erty Loan and the 31a per cent bonds!