The Birmingham age-herald., 1918-10-25
ONE IN FOUR IS
 LOAN SUBSCRIBER
By HOLLAND

By HOLLAND
 New York, october 24-When the fourth Liberty Loan campaign began, and in fact, when the preparations were under way for that greatest sell ing campaign the sworld has ever known, a remark was attributed to Benjamin Strong, Jr, of the federal reserve bank in the New York dis trict that he would be more than gratified if the total individual sub scriptions to the- loan shoul1 reach as high as $25,000. 900. or approximate ly one to every four of the people of the United States. Frequently while the campaign was in progress some of those who were directing it spoke as though it would be almost of as great importance from many points of view if at least s25,000.0 .0e0 individual subscriptions to the loan were made as would be the case were the entire $6.Go0, 100000 subscribed or even over- subscribed.
 1t was possible within 24 hours aft CT the campaign ended to report that the evidence was plentiful that this extraordinary number of individual subscriptions had apparently been se- cured. One of the reasons why sub seription by 25,000,000 individuals was deemed of great importance was due to the belief that if this hope were realized, then 1t could be statei with confidence that the attitude of the American people toward investment of considerable part of their earnings in securities that are safe and bear interest has been wonderfully changed within a year. In other words. the ex- rerience which has been met with in faatng the four series of Liberty Ge 's has been of the highest value
 r ching the American people and
 cially those whose incomes are
 oeerate, reasonable habits of thrift. fhis lesson, now well taught will .he leaders say. make all the more easy the difficult task of readjustment to peace conditions after the war Is ended. These total subscriptions by individuals who, as a whole, consti- ute one-fourth of the population of the United States, makes it certain hat loans which Secretary McAdoo Is ns'e- after to offer will be as fully srn- scribed as was the fourth Liberty Loan.
 FINANCIAL MACHINERY
 The financing of this loan is frank ly spoken of by those who have had considerable share in achieving suc- cess as ar excellent demonstration of
 
 ot American banking and financing in- stitutinos. There was no creaking of the machinery. It worked with won dcrful symmetry, net only in the large financial centers, hdt also in other dis tIicts where banking facilities are not very large.
 Many times the question has been asked how the treasury department is to realize immediately upon the sub scriptiens of six billions. That inquiry is explained by the common understand ing that there is in the United States in actual money an amount whichHis much smaller than six billions, yet the banks have undertaken to finance immediately the payment to the government of the aggregate amount of the Fourth Lib- erty Loan. It is impossible at present to estimate that part of the loan which was paid for in cash and by checks drawn by bank accounts. But the pre- sumption is that the larger part of the subscriptions was made either on the insta1lment plan or through the borrow ing of funds or credit from the banks. To make the explanation clearer, 1t may be worth while to trace the course of procedure which follows the purchase of $50 bond upon the installment plan There is a first payment of s4 in cash The bank receives that much cash at the beginning of the transaction. Then there are to be subsequent installments until the bond is paid for. The bank charges IA per cent interest, but re- ceives that interest not from the cus- toner but from the amount nominated in the bond which is 4 IA per cent. The $50 bond is held by the bank as security until all the installments arc paid and the security Is perfect.
 Then the banks make arrangements through the Federal Reserve banks, whereby if necessary credits are estab- lished. This makes the proceeds from the subscriptions immediately available to the treasury department except that treasury certificates which the banks have been buying for six months, are turned in in payment of the propor- tionate share which these certificates found it expedient, even necessary, to discount the six billion dollar loan by selling treasury certificates to the banks these certificates to be used in payment of subscriptions to the loan.
 The presumption is strong also that in some of the larger financial centers agreements were made be- tween groups of banks whereby the financing of the subscriptions to the loan could be more easily achieved.
 Many times since the campaign be- gan late in September the statement has been made by leading bankers that this financing which has been in pro- gress for little over a year and which has brought to the treasury depart ment 12 billion dollars in the form of loans, presented an absolutely new and original proposition There were no precedents for 1t in the United States. It was necessary to work out the prob- lem by utilization of new factors This has been done by the American banks in cooperation with and under the leadership of the treasury department. There has been no breakdown at any place, so wonderfully perfected within short time is this new apparatus of financial and banking machinery
 the end of November. Today's purchases by the committee were 15.J0O bags of Cubas for November shipment. In refined the demand is still light and prices are unchanged at Sc for fine granulated.
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