The Birmingham age-herald., 1918-02-07
M'ADOO WILL SELL
 CERTIFICATE IN : ADVANCE OF LOAN
Secretary Plans to Raise Three Billion Dollars in This Way at
 Once

III CC OlllAOtl 0OAA0AS VII
 raised in advance of the third liberty loan, which probably will be launched in April, by the sale of certificates of in debtedness under a plan look ing to systematic investment by every bank in these short-term securities.
 A comprehensive scheme for pre- pairing the way for the third loan, announced tonight by Secretary Nc. Adoo. provides for the issuance of $500 .O00 ,O00 or more of these certlfl- cates every two weeks until the total runs to S3,O00 100000 by the middle of March. Every national bank, state bank and trust company IS asked to set aside each week about 1 per cent of Its gross resources for investment in the certificates in telegrams sent out by MT. McAdoo.
 The first of the s50o.000.o0o certifi- cates issues under this plan was an riounced tonight. They will bear per cent, the same rate as other recent issues: will be dated February >, ana will mature May g. Subscription DOCKS are to close February l5. The cer- tificates of this and other future is- sues will be received eventually ill nayment of liberty loan receipts.
 PLAN OF SECRETARY
 The secretary's plan calls virtually for the loan by banks, big and little, Of the s3,000,0 0,0O0, 900 aggregate Of cer- tificate issues before the real liberty loan campaign starts. By this means that sum would be guaranteed in the liberty loan drive and the difference between that sum and the total or the liberty loan would have to come largely from individual private sub scribers Treasury officials also pe- li,.yed that the financial condition Of the nation can be judged closely oy the success met by the advance sale of certificates. About half of the nrst liberty loan was raised in advance by certificate sales and about two-thirds of the second loan.
  tificates of indebtedness have been sold in anticipation of the third loan and about $1.145, 5,o00,00o certificates are outstanding to be received in payment of income and excess profits taxes by next June.
 Secretary McAdoo's appeal to banks to set aside in installments 10 per cent of their resources was urgent
 a CRITICAL TEST
 aWe are approaching critical test oil the battle fronts of Europe" he telegraphed each bank. If the banks which are the first line of financial defense, fail to support the govern- nent fully in it's necessary operations we shall imperil Americas army and Americas safety. I know that I have only to state the case to command the support of every patriotic bank and banker. This is a supreme duty Of patriotism. May I count on you to do your part and to telegraph ma immediately at my expense that you will?"
 The secretary also pleaded for econ cmy of credits by banks and prQAao- ton of campaigns of economy among bank patrons.
 There is a steady growth in the movement for economy" his message said. Banks should be able by par ticipating in the campaign for econ orny, which means economy of credit as well as economy of expenditures, to teach their customers to save and ac- cumulate the means to buy govern ment certificates and bonds. By this method, distribution of treasury cer- tificates should become possible which wifi relieve the subscribing banks of at least part of their purchases and zyxs ments for the next issue of liberty bonds without undue strain"
 FINANCIAL REASONS
 Financial reasons for the plan were explained as follows:
 Y desire to postpone the next lib- ertyA loan until conditions will insure wide distribution of the bonds throughout the country. I request the board of directors or trustees of each bank and trust company to reserve each week out of it's loanable funds < for the use of the government of the United States about 1 per cent of the gross resources of their institution not to exceed in the aggregate 10 per cent, and to invest that amount in treasury certificates of indebtedness
 Certificate issues in the past have been absorbed largely by the bigger banks. Secretary McAdoo now hopes to distribute this burden more equally over the whole financial fabric of the country.
 The huge funds thus gathered te government account will not pile III in the treasury, but will remain large. ly in banks designated as government depositaries, subject to draft by tn, treasury. Tn this way the s3,0O0, 900 00, can be accumulated, ready for use al needed Tor pig war expenses. nov more than $1,000, 900. 900 a month. with out great disturbance of the bankin, business"
 Washington. February 6.-(Special The Secretary of the Treasury is anxj ous to defer until next fall the floatin of the third liberty bond issue, orig inally contemplated for spring
 In order that the government in tb meantime might not be deprived of neces sary money with which to continue th financing of the war, the secretary. afte conferences today with w. F. G. Hard ing. governor. and Paul Warburg, assc ciate member of the federal reserve sys tenn. called upon all banks member of the system for percentage of fund available each month for loans.
 The amount obtainable in this manne is calculated to be 10 per cent of all avail able lending funds in possession of re serve banks or a total of about 5000 000000, the sum which would have bee sought through the third liberty loan.
 The secretary 1t is understood doe not question the patriotism of the peopl who have so generously subscribed tt first and second loans or the power { tho people continually to invest lare sums in government securities.