The sun., 1918-11-07
BANKS URGED T0a9
= BUY CERTIFICATES
Federal Reserve Board Starts
Campaign to Aid Tax
Payments.
ONE-THIRD DUE MARCH Is
4 1-2 P. G. Issue May Be Pur-
chased by Customers With
Large Levies to Meet.

The Federal Reserve Bank OF New
York yesterday inaugurated vigorous
campaign to get the banks of this dis
trict to buy new AZ per cent. certificates
10 be issued In anticipation OF taxes by.
sending circular letter to each bank In
the district The issue Of per cent.
certificates started on August 20 was q
relative failure. only s152.5oo. 900 having
been sold, against s1.soo.ooo sold in
anticipation OF the taxes payable last
June The letter issued last night by
the reserve bank was substantially as
follows:
THE Treasury Department. has an
nounced the issue OF AZ per cent. Treas
ury certificates of Indebtedness, series T,
dated November and due March Is.
Subscriptions are subject to allotment
and the amount which will be allotted
has not yet been made public. The in
tention of this issue. however, is TO make
advance preparation for the extremely
heavy tax payments called for by the
pending revenue legislation.
ut Is contemplated in the revenue bill
that one-third of the income and excess
profits taxes ESTIMATED Mt $500. 00o,-
O00) will have to be paid on March 10.
This means a payment Of more than
$780, 100000 a sum difiicult. to handle
unless the new certificates are taken lib
erally.)
The 4 per cent. certificates of indebt-
edness, which were issued in anticipation
of tax payments and are now outstlnd-
ing, are convertible into the new series
Of IA per cent. certificates and will be
accepted at par In payment, with ad-
Justments of accrued interest. Any OF
the other issues OF Az per cent. GER
and not called for redemption will also
Be accepted
1.-The banks purchased freely the
various offerings OF the Al per cent.
certificates issued In anticipation of the
Fourth Liberty Loan and this issue of
~ per cent. certificates, which viii be
received In payment OF taxes II is hoped
win meet with an equally good response.
THE idea underlying this issue ic not
that the banks should increase their Dor
rowings to subscribe to these certificates.
but that they should make gradual prep
aration In advance for the he1vy tax
payments which are sure to go through
the banks in March. To the extent that
the banks can resell these certifc ites to
customers having iar2e taxes TO pay,
they will relieve the stress and strain
incident to SO large a financial opera
alton.
1T IS not the intention to increase the
burdens of the banks. but TO forestaii
added burdens which would fall on them
IL they did not take the certificates and
sen them to their customers Bankers
undoubtedly will respond by taking CUB
stantial amounts OF these certificates as
they have done In the past"
The purchase OF q substantial amount
o. these certificates and a-resaie to its
customers. 1t was pointed out yesterday
will relieve the Governments necessi-
ties growing out of the war. The
greater the number OF certificates issued
in anticipation of taxes and taken by
the banks, the smaller the amount OF
certificates to be issued In advance OF
and Fifty Liberty Loan. an announce
ment OF new offering of these certifi-
Gates awaiting the outcome OF the sale
Of tax certificates. The latter. posses
the advantage OF availability, for public
distribution, while the former usually
are retained In the portfolio Of the bank
or are used in new borrowings from the
reserve bank. o, =, -~.. F