New-York tribune., 1918-03-27
Bankers Welcome
New Loan Drive
AS Reply to Foe
Strong Pledges Overwhelm-
ing Support From This
District

America will speak it's heart in re-
sponse to the German offensive in
France by the eagerness with which its
people subscribe to The third Liberty
Loan bonds soon to be offered. In
analyzing Secretary McAdoo's plan for
the forthcoming financial campaign,
Benjamin Strong, chairman of the Lib
erty Loan Committee, last night indi-
Gated that the announcement Of the new
loan came at q psychological moment
in this nations history
"The announcement" Mr.. Strong de-
clared, cas- to the amount and terms of
the new Liberty Loan comes at an op-
perfume moment. In neither of the
two previous campaigns has the war
situation been anything like as serious
as it is now. To-day the American ma
ton is aroused over the menace of the
German drive, and its response will be
evidenced in the new loan
"The announcement contains several
new features, which command instant
attention and approval:
The Five Essentials
"First, the amount at present asked
for by the government is only $3,000,-
900 900, figure far below the general
expectation of what might be required.
Although it is provided that oversub-
scriptions may be allotted. the commu-
nifty feels much relieved that the Treas
ury has been able to reduce SO mate
rally its estimated requirements for
current disbursements.
Second, the higher interest rate of
AZ per cent, as compared with 31s per
cent on the first loan and per cent on
the second, will broaden the appeal Of
the issue.
"Third, all existing issues of Liberty
bonds are convertible into the new Az
per cent bond, so that holders Of these
issues may secure the higher interest
return afforded by the new bonds. The
provision that the impending issue is
not convertible into any later issues in
dicates the governments expectation
that 4 4 per cent is as high an interest
rate as it will be obliged to pay on it's
long term obligations issued during the
war.
Fourth, the new bond, and the old
bonds if converted, will be available at
par in payment of Federal inheritance
taxes. This is a provision likely to Sc
cure unusually large subscriptions
from wealthy individuals whose estates
Federal inheritance tax and whose
heirs might otherwise be under the
necessity of selling for this purpose Sc
curltles during a period Of low prices.
Fifth, the new issue provides for a
per cent sinking fund which is cal
culated to operate during the period
of the war; so as to afford steady and
strong support to the market for the
bonds.
"The citizens of the I'd Federal
Reserve District have always done far
more than their allotted portion OF
ssubscriptions to previous issues Of
Liberty bonds. We know that they
and all the organizations which have
worked SO whole -heartcdly in the past
with this committee can be relied
upon, when the new campaign opens
early in April, to yield to it their
prompt, their generous, their patriotic,
their overwhelming support"
What Others Think
Among bankers the feeling that the
next loan would be easily oversub-
scribcd seemed to be unanimous Many
Of the financial leaders praised every
detail of the McAdoo plan, and the
only features which were the sub
ject of any criticism were the lack Of
convertibility of the Third Liberty
Loan bonds into future issues, and the
fact that the interest rate is not to ex-
ceed Az.
Some of the opinions about the an
nounced details of the new loan from
representative financial leaders follow:
Francis L. Hine, president of the
First National Bank, said:
Three features of the Third Lib
erty Loan will be favorably received.
They are the amount, the sinking fund
provision and the acceptability of the
bonds for the payment of inheritance
taxes"
Lewis L. Clarke, president of the
American Exchange National Bank,
said:
at was gratifying to learn from
Secretary McAdoo's announcement that
the requirements of the government at
this time do not exceed the amount
of the Third Liberty Loan Offering
SO 600, 100000. The decision to reserve
the right to allot oversubscriptions to
the new issue seems very wise, because
with developments abroad in the pres
ent titanic struggle it seems certain
that the citizens of this country will
respond to the governments appeal for
funds IN way to develop possibly a
billion or more oversubscriptio
Forecasts Success
ID. r.. Pomeroy, vice e-president of the
Bankers Trust Company, said:
"a sinking fund bond is always pop-
ular with investors, and that feature
of the new Liberty Loan Offering will
be sure to stimulate subscriptions, as
1t provides a means of retiring the
bonds, thus automatically furnishing a
market for them. 1t also will tend to
insure the stability of the market price
of the bonds"
LIE Roy w. Baldwin, president Of the
Empire Trust Company, 12O Broadway,
said:
"The terms are most satisfactory
The amount of the issue is a very
favorable factor, and far less than was
expected. The provision for sinkinp
fund is another fine feature. The init.
nation that Az per cent is to be the
fnal interest rate is another very
favorable factor, too''