New-York tribune., 1918-03-26
Sinking Fund Planned to
Keep New Issue
at Par
Loans Small Size a
Surprise to Experts
Einanciers Expected Both
Amount and Interest
To Be Higher

WASHINGTON, March 25.-The third
Liberty Loan, to open April 6, will be
for S3,O00,0O0,00O and all over.sub-
scrlptions at 4 4 per cent interest.
Bonds of the first loan, bearing 3h
per cert interest, and of the second
loan, at per cent, may be converted
INTO the new bonds, but those of tho
third loan will not be conve rtible into
any future issue. This announcement
was MADE tonight by Secretary Nc
Adoo' with the comment that "the great
events now happening in France must
IRE the soul of every American with
he" determination to furnish all the
aoiiars and all the material resources
VI America that are needed to nut an
end to the execraSle atrocities Of Cor
man militarism''
!" connection with the loan, the Sec
ieeary plans to establish a sinking fund
with which to purchase back anv bonds
OF the third loan thrown on Tho mar.
kef' in order to aid in keeping the price
up 10 par The maturity of the bonds
IS yet to be determined, but it was Of
hclaily stated that they would be ,onc
1erm' probably between twenty and
thirty years.
Olher features which will be sottled
as soon as Congress passes the neces-
Sary authorizing legislation are the
'e"s'h o. the campaign and the terms
VI payments on the bonds.
Larger Loan Had Been Expected
Most financial observers were s,r
prised at the comparatively small s;1o
OF the loan. and at the interest rate
oo'h OF which they had expected to he
higner. Reduction OF government ex-
pendltures and Allied loans below the
.or1ner estimate is responsible for tho
loans size, Secretary McAdoo ox.
p'a'"ed' lie said the bonds were made
Aoh-convertlble to put an end to ev-
pectatlons of higher interest rates in
he future, indicating his purpose to
MAINTAIN the ~ rate for future lo.ns
Legislation will be drafted to.morrou,
ny Chairman Kitchin, of the House
ways and Means Committee. to nrov;do
-or an additional bond authorization oe
i'oVo'ooU.O0V more than the 1856 600 :
wv sum already authorized but mic
sued, for the increased Interest ra+o
Iol continuance of loans to the Allies
Nnis summer, and for issuance of moro
t'.ah the $4,000, 100000 certificates
VI indebtedness now authorized An
eAofe VIII be made to rush this lepis-
iatlon through both houses this week
80 mat finai plans may be made for the
''iro Liberty Loan and the engraving
VI the bond faces by the first of next
week no opposition to the legisla-
uon IS looked for in either house.
Expenditures Less Than Expected
~ announcing the loan Secretary
-icAdoo made the following statement.
ihe Secretary Of the Treasury in
conference with Mr. Kitchin, chair
man Of the Ways and Means Commit
'ee' to-day outlined his plan for the
taird Liberty Loan. Actual expendi-
lures Of the United States government
ana Of the Allied governments having
oeen much less than had been indi-
Gated oy the estimates, the amount of
tne next loan will be only $4,000, ,000.
ooo, the right being reserved to allot
oVersubscriptions.
ne Secretary will ask authority
rom congress 10 issue bonds bearing
interest at the rate Of M per cent
per snnnm, acceptable at par and ac-
lued interest in payment for United
sars inheritance taxes and having
ehe benefit Of sinking fund of 5 per
I'm per annun during the period Of
=, II ~ the belief Of the Secretary that
me rate now proposed is sufficient. and
may ny restricting unnecessary capital
i1suez and by inducing the people who
Ssnbscribe for Liberty bonds to save
mem and keep them for investment, and
~ purchases With the sinking fund
1fcIn those who find themselves com
PEELED 20 sell, further Increases in the
interest rate may be avoided. In order
70 put an end TO the expectation Of
hiHher interest rate. it is proposed that
conversion privileges shall be climi-
haIed from the new bonds. but the hold
ss of Liberty bonds Of all existing
assues viii be given an opportunity
convert their bonds into the new
~ per cent.
To Provide for Future Loans
"In addition TO the foregoin9 prip-
E,paI items Of the proposed programme,
1onkrssS will he asked for authority