Evening star. [volume] (Washington, D.C.) 1854-1972, 1918-03-26
Rate Proposed, Is ~ Per Cent.


Rate Proposed Is ~ Per Cent.
THE Secretary will ask authority
from Congress to issue bonds bearing
interest at the rate of X per cent per
annum. acceptable at par and accrued
interest in payment of United States
inheritance taxes and having the bene-
At of sinking fund of per cent per
annum during the period of the war
and for one year thereafter.
'It is the belief Of the Secretary that
the rate now proposed il sufficient and
issues, and by inducing the people who
subscribe for liberty bonds to save and
| to keep them for investment, and by
purchases with the sinking fund from
those who find themselves compelled to
sell, future increases in the interest
rate may be avoided. In order to put
an end to the expectation of higher
interest rates, it Is proposed that the
conversion privilege shall be eliminated
from the new bonds, but the holders
will be given an opportunity to convert
| their bonds into the new ~ per cent
bonds.
| "In addition to the foregoing principal
items of the proposed program, Con-
gress will be asked for authority to
issue bonds to the amount of $4,500,-
100000 in addition to those now author
lied. in order to provide for future
tissues; for authority to issue additional
Treasury certificates of indebtedness;
for authority to make additional loans
to the allied governments during the
summer; and for authority to deposit
vY
national banks. state banks and trust
companies throughout the United States
In the same manner as the proceeds of
the liberty loans"
Most bankers and business men with
whom Secretary McAdoo has conferred
recently indicated that they expected a
loan Of about $4,000, 000. 900 at an in
terest rate higher than AN per cent
They brought word that the country
was ready to absorb that amount.
Secretary McAdoo's advisers were not
unanimous in their opinion of what the
interest rate should be, but practically
all agreed that money market conditions
would be less disturbed by Az per
cent rate than a ~. The sinking fund
provision of the third loan, which the
first and second issues did not have
Is expected to prove a strong influence
in preventing bonds from falling far
below par as other issues already have
done.
The necessity for further authorize
ton for certificates of Indebtedness
arises from the fact that about $3,250,-
100000 already are outstanding and the
s.. 900. 100000 more before the third loan
closes, while the maximum authorized
under present law is $4,000, 00o, 900.
Credits to Allies, Present Amount.
Credits to allies now amount to 1880
100000, and about $4,000, o0o, 900 author
lied loans yet remain to be executed.
This would not be SUFFICIENT to continue
the rate of $500. 000, 900 month through
the summer months, and consequently
an additional authorization is asked by
Secretary McAdoo. The amount Of this
will be determined by Congress.
The legislation to deposit tar collec-
tons with banks is sought as a measure
to prevent big accumulations Of funds
in the Treasury when taxes are due in
June.
Kitchin Prefers Heavier Taxes. :
| Commenting on the interest rate, OF
AZ per cent. Chairman Kitchin said
| last night:
IF people are not willing to lend the
government money at that rate in these
times. heavier taxation is the only
alternative
i A measure to encourage sale Of liberty
bonds by removing the limit of loans
which national banks may make to a
Il borrower who wishes to buy bonds
was reported to the House yesterday
by Chairman Glass of the banking and
currency committee.
Secretary McAdoo had indorsed the
bill in letter saying:
Convenient Excuse, Says McAdoo.
Il am told that there are q good
many banks which will, because OF this
Limitation decline to make loans where
their customers desire TO subscribe. II
also furnished convenient excuse