New-York tribune., 1918-06-17
McAdoo to Put Out That
Amount of Certificates
of Indebtedness
Bonds Likely
In October
Early Announcement Made
SO Banks Can Prepare
to Absorb Issue

WASHINGTON. June 16.-The gov
ernment's financial programme for the
next four months was disclosed to-day
by Secretary McAdoo's announcement
that in preparation for the fourth
Liberty Loan, to be fioated probably in
October, about s6,o0O,00O,Oo certih-
Gates OF Indebtedness will be issued.
They will be offered in blocks of $780,
100000 each every two weeks beginning
June 25.
Every national bank and trust COM
pany is asked to assist the government
by subscribing per cent of its gross
resources monthly. The certificates
will bear Az per cent. interest, like
those preceding the third Liberty Loan,
and will have varying maturity periods,
none exceeding four months.
In addition, an undetermined guam
tity-perhaps s2,oOo 0oo,0 ,000-of tax GER
tifcates will be issued during the sum-
mer for use in paying taxes a year from
now, but this quantity will be deducted
from the s6,00o,000 900.
The announcement of this programme
indicates that the fourth Liberty Loan
will be for at least $4,000 100000, the
exact amount depending on govern
ment expenditures in the next few
months. The Treasury already has es-
timated these roughly at about S12 2,O0O,-
100000 between July l and next Janu-
ary l.
The sale of certificates under the
-.
amounts virtually to borrowing in ad-
vance from banks on projected popular
war loans and tax collections, and
periodically refunding those short time
obligations in long term Liberty bonds.
Depositary banks make 2l2 per cent net,
the difference between the Az per cent
interest paid by the government and
the per cent collected for deposits.
The future financial programme was
announced at this time to enable banks
TO prepare for the government de-
of the each of the $500 national banks
and 10000 state institutions, Secretary
McAdoo said
"The expenditures of the govern
ment, as nearly as can be estimated,
will require the sale of certificates of
Indebtedness UP to the LIST of Novem-
Der. 1918, aggregating approximately
ss,o00,000 600. This would involve the
issue every two weeks OF about $780,
100000 of certificates substantially
similar in character to those issued
prior to the third Liberty loan, except
that they will have various maturities
not exceeding four months. For the
months of July and August that pro-
gramme will be followed as nearly as
possible.
THE first issue of the certificates
will be dated June IS, will mature Oc-
tober 25, with interest at 4 u per cent,
and similar issues, it is expected, will
be made on Tuesday of every other
week following June 25 1t is. how
ever. contemplated that at convenient
and favorable period during the sum-
mer an offering will be made to the
general public directly, and through
the banks, of an amount yet to be de-
termined, perhaps $2,000,o00,000 of GER
tlficates OF suitable maturities for use
by taxpayers in paying next years
taxes, viz, taxes payable June, 1919,
levied under existing and pending legis-
lation. To the extent that certificates
OF that character are sold, substantially
an equivalent reduction in the amount
of the regular fortnightly sale of GER
tlfcates issued in anticipation of the
next Liberty loan will be effected.
"ln giving this timely advice of the
estimated requirements of the Treas
ury to all the banks of the country.
and through them to those who expect
TO make payment of taxes in 1919, it
is hoped that they will make arrange
ments promptly of such a character
that no delay will be experienced in
the sale and distribution Of Treasury
certificates of both issues.
"The Federal Reserve banks viii ad-
wise all national and state banks in
their respective districts of the amount
OF certificates which they are expected
to take from time to time in pursu-
ance of this programme, which amount
can be figured roughly to equal 21a
per cent of the gross resources of each
bank and trust company for every
period of two weeks. or a total of 5
per cent monthly. The total number
OF bi-weekly offerings of certificates to
be made to the banks will somewhat
depend upon the amount to be raised
from the public through the sole Of
tax certificates as above described
The banks of the United States can
render peculiarly helpful service to
our gallant sons by keeping the Treas
ury OF the United States supplied with
the money required by the government
TO furnish every American hero with
the things he must have to fight vic
.oriously or to die gloriously. am
sure that no patriotic banker in the
United States will fail to do his full
iheed OF essential service to his country
@ha TO ner noble defenders"