New Britain herald., 1918-03-26
NEW LIBERTY LOAN
 FOR $33,OOO,OOO,OOO
Rate Of Interest 4 IA Per Cent,
 MCAdOO Announces

Washington, March 26-The third Liberty Loan issue, the drive for which will soon open, will be for $3,- 00,0O0,O0 and the rate of interest will be Ii per cent.
 Formal anouncene ent to that effect was made last night by Secretary Me- Adoo, following d, conference with Chairman titchin of the house ways and means committee, who will inn mediately introduce the bill on which will be based the legislation necessary for the new issue. Chairman Kitchin hopes to have the measure passed by the house Thursday
 The amount. $3,O00, 0,O00,000, is much smaller than had been expect ed, but none the less a reasonable one in view of the over estimat ton of war expenditures. The interest rate, A per cent, is a surprise, F per cent having been urged by many of the secretary's advisers in banking cir cles.
 The cOnyertibility privilege stops with this issue. Previous issues may be converted into bonds of this third issue-eyen bonds of the second issue that have been given in exchange for those of the tirst--but thereafter con- version ceases.
 The new bonds will contain a con- d1t1on, written in the interest of the government, providing for sinking fund of per cent. during the period of the war and for one year there after Thus the government will be able to buy the bonds of f, ese who find they are not able to hold them
 The character of the new bonds is thus distinctly different from that of either of the previous issues. Treas ury financial experts believe the effect in the financial world will be whole some, giving holders of bonds of the previous issues a disposition to retain their investments and stimulating the saving habit among the masses.
 The secretary's announcement cf the bond issue follows:
 The Official Announcement.
 The secretary of the treasury, in a conference with MT. kitchin. chair man of the ways and means commit tee today, outlined his plan for the third Liberty Loan. Actual expendi-
 
 ment and of the Allied governments having been much less than had been indicated by the estimates, the amount of the next loan will be only s3,00O. O.000,000, the right being re- served to allot over r-subscriptions. The secretary will ask authority from congress to issue bonds bearing in- terest at the rate of 4 IA per cent per annum, acceptable at par and accrued interest in payment of United States inheritance taxes, and having the benefit 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 is sufficient and that, by restricting unnecessary capital 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 form those who find themselves compelled to sell, future increases in the in- terest rate may be avoided. Tn or der to put an end to the expectatiin Of higher interest rates, it is pro- posed that the conversion, privilege shall be eliminated from the new DOnQS, put the lOluSTS OI LlD6TLy bonds of all existing issues will be given an opportunity to convert their bonds into the new 4 1-4 per cent bonds.
 In addition to the foregoing prin- cipal items of the proposed program, congress will be asked for authority to issue bonds to the amount of $4,- 500, 900, 900, in addition to those now authorized, in order to provide for future issues; for authority to issue additional treasury certificates of in- debtedness; for authority to make ad- Gitional loans to the Allied govern ments during the summer; and for authority to deposit income and ex- cess profits taxes with national banks, state banks and trust companies throughout the United States in the same manner as the proceeds of the Liberty Loans.
 1T am sure," the secretary added, that the people will respond to the third Liberty Loan with the same loyalty and enthusiasm that charac- terized their support of the first two loans. The great events now happen ing In France must fire the soul of