The Goldfield news and weekly tribune. [volume] (Goldfield, Nev.) 1911-1947, 1917-07-14
NEW ISSUE OF LIBERTY BONDS

Opinions of bond experts and bankers upon future issues by
the United States of Liberty bonds are set forth in an interest
ing article by Frank NJ. Huston in the Chicago Herald. The rate
of interest which the bonds will bear is a matter upon which,
according to opinions quoted, there is much difference in the
financial world. When the first issue was announced, it was
said generally that the others to follow would in all probability
bear a larger rate, and it has been thought that the figure fol-
the next allotment would be four per cent.
1t is considered likely that the next loan will be actually of
fered about September 4, with the probability that more treas
ury certificates of indebtedness anticipating the proceeds of the
Liberty Loan bond issue will be offered from time to time dur
ing July and August in S~2J0OOO,OOO installments. This methoo
of financing a loan has proved satisfactory in protecting the
money market from any stringency of a serious character.
There are shrewd bankers and bond men, however, who do
not accept the general theory that the interest rate on the next
gov eminent war loa3 should be increased to four per cent. ono
reason for this is that it involves the conversion of all the So
O%OOOOO,OOO Liberty bonds just subscribed to new bonds bearing
the higher rate. 1t would also unsettle other bond investments
and cause further readjustment in market prices.
Doubtless the tremendous oversubscription of the $4,000
100000 Liberty Loan offering has encouraged the belief that
there is a wide and strong market here for American govern
ment securities. Charles f. Mitchell, president of the National
City Bond company, a subsidiary of the National City bank, ds-
cussing the question, said:
Zone thing that makes me believe that there is going to be
experienced a better market { + the Liberty bonds is that mtn>
large and smaller banks all over the country are short of those
bonds. They did not intend to be short, but; nevertheless, they
ARE. due to the fact that these banks did not follow instructions in
sending in subscriptions. Instead of sending in indIyidIa
names, a great many banks simply sent in one, their own, for
one million two million or five million dollars, or whatever the
total happened to be. Under the allotment plan announced by
the treasury department those banks are not going to get any
bonds, or, if 50, only a small percentage of their subscription.
Having sold the bonds, these banks are short and must go into
the open market to buy to make deliveries to their custom
ers.
Such buying will necessarily stimulate the market for
Liberty Loan bonds and the bond market generally. Large in
vestors who have been saving money to buy Liberty bonds,
but who have been cut out largely by the allotment plan, will
buy other bonds or will await the next offering of government
war bonds. Nevertheless this money will not remain idle.
Some of it will go into Liberty bonds at the same market price.
There will also be buying by small investors who know bonds
and buy them entirely for the income returns. Many o.
these people did not do their part in the Liberty Loan offering
but what they are likely to do is to buy industrial bonds, offer
ing a higher income rate"