Douglas Island news., 1918-04-12
BONDHOLDERS
 INTERESTED
Information Concerning Converting Previous Bonds Into Those
 of Third Issue

NNIM NNNINN NNNNN'H' |N " '.NN no
 Federal Reserve District
 Dear Sirs
 There arc three issues of Liberty Loan Bonds now ou Che market:
 !. First Liberty Loau l5-3O
 year. 3ia per cent Gold Bonds, dated l9l7 due 19t7, rcdccmoblc lac Che option Of Che United States on and after June 10, l932 EX- cmpt from all taxation except estate and inheritance taxes.
 9. First Liberty Loan Converted. .15-ao year. ( per cent Gold Bonds dated 1917. due l9i7 rcdcomoblc at Che option of Che United States on and after June 10. 1882 Exempt from an taxation, except estate or
 inheritance taxes. surtaxes and cX- cess profits and war profits taxes; exempt from normal income taN. Interest on principal amount of ! S5.oOO exempt n calculating sur taxes.
 8. Second Liberty Loan lo-2j ycar. { per cent Gold Bonds. dated .lgI7. due 19ie. rcdccmahlc at Che option of Che United States ou and after November 10. 1927. ENcmp- ton same as No. 9.
 An bonds of theaboyc thrcc series are convertible into bonds Of Che Third Liberty Loan
 The First Liberty Loan 3ia per cent bonds were issued with Che conversion privilege which entitled holders Go bonds bearing interest at Che same rate as any subsequent series of bonds issued at a higher rate of interest than 2ia per cent per auuum. provided such bonds arc issued before Che termination of thc war between tbc United States and thc Imperial German government. and provided the conversion priyil- cce is exercised within six months after Che issuance Of bonds of such subsequent series
 The q per cent bonds Of Che First Liberty Loan Converted and Che Second Liberty Loan bonds Nohe is- sued with conversion privilege which entities Che holders Co bonds bearing interest at thc omc rate as Che next subsequent series ot bonds which may bc issued at a higher rate. provided such houds arc issued before tbc termination of thc war. and provided thc conversion privilege is exercised within six months after Che issuance of bonds of such subsequent series.
 10 win be observed that holders of aia per cent bonds must surrcu- der tho same for conversion before May 10. 1918. n order Co avail themselves of thc privilege arising as consequence of che issue of Che Second Liberty Loan bonds. ll. how ever. it should Doc desired Co com vert into bonds bearing the same rate as the Third Liberty Loan. which has been announced, at ih per cent. the holders of 3ia per cent bonds may surrender same at. any time within six months after thc date of issue of the ca per cent bonds and receive bonds boar iu gthc latter rate.
 The holdc srof { per cent bonds who do not surrender Che same for conversion within six months after the issue of Che next series of a higher rate than ( per cent win lose once and for an tho conversion priv |ncec. even though again thereafter bonds be issued bearing interest ot Ia higher rate.
 ! As am example of tho working Of | the conversion privilege let ms as- sume that holder of 3i3 per cent. bonds does not exercise Che privilege of conversion into bonds bearing inc tercst at the rate of ( per cent and ! tbat the next issue bears interest ot |4u Der cent and thc next succeed ina. issue per cent Such holder of 2is bonds may make conversion directly into bonds bearing interest |at the rate of Q per cent Holders of 4 pcr cent bonds. however would not have this privilege. and if con version into 4ii per cent bonds is not made che conversion privilege is forever lost.
 Announcement has just been made by Secretary McAdoo that Third Liberty Loan bonds will be ih per cent bonds and will not bear thc conversion privilege.
 In an conversions it should bc re-
 mcmbered that Che bonds issued upon such conversions are not Che
 bonds ot Che next Liberty Loan, but
 arc bonds of a special issue Che
 terms of which arc identical with
 the next issue, except that the orig
 inal interest periods and dates of
 maturity are retained. Thus, the 3ls per cent bonds are not convert ed directly into Second Liberty Loan 4's but put into the First Liberty
 Loan 4's." The Second 4's are 1O- 90 year bonds. the interest perods being May and November; the First