The sun., 1918-08-13
MANITOBA LOAN
QUICKLY ABSORBED
Canadian Bankers Discuss Flo
tation This Fall of
Victory Loan.
HIGHER RATE LOOKED FOR
American Investors Counted
On to Take Considerable
of New Issue.
snsctnl bespoteA to TIE sur.


TORONTO. Aug. 12.-The most recent
issue OF Canadian securities In the home
msrket-s1, 100000 Province Of Mani
toba 8 per cent gold bonds due 1928
wa, quickly absorbed by the investing
,rublic. While the $40 per cent. yield to
,nv.stors was regarded as decidedly at
Itract,ye. the financial critics have taken
,he quick absorption as being also an
Indication that the bond market In Mon
srsal and Toronto Is pretty we'll cleaned
mn and that the situation in that respect
a. favorable for the fotation of tho sec
ond Victory Loan in the fall.
n "a not known as yet whether Canada
will launch her big loan In september
at the same time as the great Liberty
fotation Is inaugurated In the United
states In some respects September
would be inconveniently early for the
Canadian transaction. The banks are
then lust commencing the work OF
financing the western wheat crop. and 1t
would perhaps suit their circumstances
better to have the loan appear little
later.
Again. while Canada's loan. " ioated
at the same time, would probably derive
some benefit from the booming OF the
American Issue, there might be other
advantages ODthlHeus pcTlidpS
portant, through waiting until the Lib
.rty Notation is successfully completed.
II would seem that there would then be
better chances Of securing sundry sub
scriptions from American citizens.
The results OF the two transactions
will no doubt be closely watched In
allied and enemy countries. II the LIB
erty Loan Is fixed at $4,000. o00, 900. that
will represent $50 a head Of population,
averaging $500 a family And with
Canadas Victory Loan at 100000. 900
Il would call for $50 a head. or $3.50 a
family. This shows that tremendous
efforts will be necessitated on both SIDES
of the boundary line. That both loans
will be successful Is the general belief.
Some OF the experts. however, hold the
opinion that a too determined inststence
upon low rate OF interest may seriously
teopardize the success OF this or later
Rotations When the investment funds
Of the nation are pretty we'll cleaned up
Il may be necessary to base the Govern
ment's appeal to the people more largely
upon a high yield and not 50 much upon
patriotic sentiment
Terms Of Canada's Loan.
I. is altogether likely that Sir Thomas
White, the Finance Minister. will not
divulge the terms Of the forthcoming
loan until shortly before the time OF
issue. but there has been considerable
discussion in the press and elsewhere as
to the terms that ought to prevail The
Montreal Financial Times has been
strongly urging an issue Of bonds sub
ject to the Dominion income tax. The
bonds of all four domestic loans previ-
ously issued in Canada are entirely free
from the Dominion income tax. As the
interest yield Is around 81 per cent.
one can easily SEQ that the tax exemp-
ton feature makes them peculiarly at
-ractive to wealthy people. whose in
comes are subject to heavy supertaxes
The advantages secured by Canadian
rich men through buying and holding
the Dominion tax exempt bonds are thus
considerably greater than those secured
by American men of wealth through
buying any OF the United States wal
issues The first Liberty Loan with Its
complete exemption from the United
States income tax bears only 81 pei
cent. as against S " per cent nominally
Borne by the Victory honda
As Canada has $3.50, 1000, 900 OF tar
exempt bonds now outstanding. the
question OF tax exemption or the new
issue, which is expected to amount tc
34oo. 900 900. Is OF marked importance
al are eAeiipe eHoie wiz eAls' Hhes
Of &l,l60, o00,0 900 of investments, the in
come from which Parliament cannot tax
However the impression now prevailing
Is that the Finance Minister will no
put the success of his issue to hazard
Through abolishing the tax exemption
feature, If that were abolished i
would necessitate a rate OF 6 per cent
and perhaps higher. In view OF tn,
current quotations for the Victor,
bonds It is thought that IL conditions
do not meantime change for the worse
the Yield on tax exempt Victory LOAF
Of 1900, 100000 this fall might be fxec
1T 81 per cent. II monetary condition!
become unfavorable 1t might take a
per cent. rate to market so large al
issue,
The Railway Rate Increase.