Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1918-04-18
WAR FINANCE BONDS
NOT U. S. OBLIGATIONS
Leading Features Of New Isl
sue Soon to BE Placed on
the Market

boston, April tb
As bopds authorized to be issued By
the new war Finance Corporation viii
soon he upon the market, II is INTEREST,"
ing to note what these bonds are ana
how they compare with bonds issued bv
the United States Government II may
cause some surprise to learn that the
bonds issued by the war Finance Cor@
poraton are not obligations OF ths
United states, although in their tax
exemption features they are made slnni-
lar 10 the second and third Liberty Loan
issues Although il seems an anomaly
that bonds issued by n corporation
created by the United states and whose
entire stock is subscribed and held by
the United states are not obligations
Of tho United states. II may be felt
that tho Government has a moral re-
sponsibiity which 1t will not shirk III
upholding the credit Of the war finance
bonds IA
Section II OF the war finance act SAYS.
That the United States shall not 81
liable for the payment Of any kind or
other obligation or the interest thereon
issued or incurred by the corporation.
nor shall it include any liability In
respect or any act or omission of the
corporation"
The taX-eNemption features OF the
new war finance bonds are covered in
Section l6 THAT any and all bonds
issued by the corporation shall be ex-
ompt both as TO principal aud interest.
from all taxation now or hereafter i'm
posed by the United States. any state
or any Of the possessions Of the United
states or by any local taxing authority.
except tn estate or inheritance taxes
and do graduated additional income
taxes, commonly known as surtsxes, and
excess profits and war profits taxes, now
or hereafter imposed by the United
states, upon the income or profits Of in
diNiduals, partnerships. corporations or
associations The interest on an amount
OF such bonds the principal of which
does not exceed in the aggregate S50OO
owned by any individual, partnership,
corporation or association. shall be ex-
ompt from the taxes referred to in
clause (h)."
Section 2 authorizes the corporation
TO issue and have outstanding its bonds
in an amount aggregating not more than
SIX times its paid-in capital. such bonds
10 mature not less than one year nor
more than five years from date of issue,
70 pear such rate or rates Of interest,
and may be rodcemable before maturity
al option of the corporation. as may be
determined by the board Of directors. but
rate or rates OF interest shall be subject
TO the approval Of the Secretary OF the
Treasury The bonds shall have a first
and paramount floating charge on all
assets Of the corporation. and the cor
poration shall not at an:, time mortgage
or pledge any Of its assets Bonds may
he issued at not less than par i'm pay
ment OF any advances authorized to he
made by the corporation. or may be of
fered for sale publicly or to any indi-
vidual, firm, corporation or association.
at such price or prices as the board OF
directors, with approvM Of the Secretary
OF the Treasury, may determine.
Unlike the three issues Of Liberty
Loan bonds on which maximum rate OF
interest was fixed by law and which
could not he sold below par. the directors
Of the War Finance Corporation are
given free rein. with approval Of the
Secretary Of the Treasury. to determine
rate Of interest which oonds shall bear
and price at which they can be sold,
even selling bonds below par If neces-
sary.