Evening star., 1918-02-07
3B|LL|ON LOAN TO
PUSH LIBERTY DRIVE
Secretary McAdoo Announces
Plan to Pave Way for Third
U. S. Victory Issue.
BANKS TO SUPPLY FUNDS

In advance of the third liberty loan.
which probably will be launched in
April, $4,000. 100000 will be raised by
sale Of certificates of Indebtedness under
a plan looking to systematic investment
by every bank in these short-term Sc
curities.
secrersry McAdoo announced last
night a comprehensive scheme for pre-
paning the way for the third loan. 1t
provides for the issuance of s5oo,o00.ooo
or more of these certificates every two
weeks. until the total runs to $4,000
900 900 by the middle of March.
Every national bank. state bank and
trust company Is asked to set aside
each week about l per cent OF It's gross
resources for investment in the certin-
Gates in kilograms sent out by Mr.. Nc
Adoo.
Announce First Issue.
The first of the s5o0,o00.o0o certii-
cate issues under this plan was an
nounced last night They will bear
per cent, the same rate as other recent
issues, will be dated February and
will mature May 3. Subscription books
are to close February 10. The certlf-
Gates of this and other future issues VIII
be received eventually in payment of
liberty loan receipts
The Secretary's plan calls virtually
for the loan by banks, big and little.
of the three-billion-dollar aggregate
of certificate issues, before the real
liberty loan campaign starts. By this
means that sum would be guaranteed
in the liberty loan drive, and the diff
ference between that sum and the total
of the liberty loan would have to come
largely from individual private sub
scribers.
Treasury officials also believed that
the financial condition of the nation
can be judged closely by the success
met by the advance sale Of certificates.
About half of the first liberty loan
was raised in advance by eertlhcate
sales and about two-thirds of the sec
ond loan.
s4oo, 100000 Sold.
Already 4oO.oooooo worth of GER
tificates of Indebtedness have been sold
in anticipation of the third loan, and
about S1,145 600 900 certificates are out
standing, to be received in payment of
income and excess profits taxes by
next June.
Secretary McAdoo's appeal to banks
to set aside in installments 10 per cent
of their resources was urgent
I'VE are approaching a critical test
on the battlefronts of Europe" he tele-
graphed each bank. If the banks,
which are the first line of financial de-
fense, fail to support the government
fully in Its necessary operarl rn Mons snd we
Americas safety. l know that l have
only to state the case to comma nd the
support of every patriotic bank and
banker. This is supreme duty OF pa
triotism. May I count on You to do
your part and to telegraph me imme-'
diately at my expense that you will?'
Pleaded for Economy.
The Secretary also pleaded for econ
omy of credits by banks and promotion
of campaigns of economy among bank
patrons.
.There is a steady growth In the
movement for economy" his message
said. Banks should be able by par
ticipating in the campaign for econ
omy, which means economy of credit as
well as economy of expenditure, to
teach their customers to save and ac-
cumulate the means to buy govern
ment certificates and bonds By this
method, distribution of Treasury GER
tihcates should become possible which
will relieve the subscribing banks of at
least part of their purchases and fur
nish the means of making payments
out undue strain"
Financial reasons for the plan were
explained as follows:
'I desire to postpone the next liberty
floan until conditions will insure wide
distribution of the bonds throughout
the country. I request the board of
directors or trustees of each bank and
trust company to reserve each week
the government of the United States
about 1 per cent of'the gross resources
Of their institution, not to exceed in
the aggregate 10 per cent. and to in
vest that amount in Treasury GER
l40cates Of Indebtedness"
Taken by Banks.
Certificate issues in the past have
been absorbed largely by the bigger
banks. Secretary McAdoo now hopes
to distribute this burden more equally
over the whole financial fabric of the
country.
The huge funds thus gathered to goH-
eminent account will not pile up in the
Treasury. but will remain largely in
banks designated as government de-
positaries. subject to draft by the
Treasury. In this way the three billion
dollars can be accumulated. ready for
use as needed for big war expenses,
now more than $1,000. 600, 900 a month,
without disturbance of the banking
business.