Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1918-03-28
NEXT LIBERTY LOAN
FOR $3,000,000,0O0
Rate Of Interest Az per Cent
Neutrality-suspicious. Will
Be Accepted.
BONDS NON.CONvERTIBLE.
Issues Of the First ana Second Liberty
Loans. However. May he Converted
into the New Ans.


Adoo announced tonight that the third
Liberty Loan would be three billion dol
lars. at four ane one quarter per cent.
and that all over subscriptions would be
accepted.
The new bonds will be non-convertible,
but bonds Of the first and second Liberty
Loans may be converted into the new Az
per cent securities.
Authority to issue N6o0. O00, 900 in bonds
In addition to the "a, Geo, 900. 900 already au-
thorised and unissued is proposed in new
loan legislation prepared for submission
to Congress. SO that. the total amount
which may be issued is 1871 1000.
Mr.. McAdoo said expenditures of the
United States and the allied governments
had been much below estimates and that
consequently II was not necessary to
make the loan larger than three billion
dollars.
Congress will be asked for authority to
make additional loans to the allies during
the coming summer. The decision to make
the new bonds inconvertible, the secre-
tary announced, was reached in order to
put an end to the expectation of higher
interest rates.
M'ADOO'S STATEMENT.
Secretary McAdoo Issued this statement:
1.-THE secretary Of the treasury in a
conference with Mr.. Kitchin, chairman
Of the ways and means committee, to-day
outlined his plan for the third Liberty
Loan. Actual expenditures ofthe United
States government and of the allied gov
ernments having been much less than had
been indicated by the estimates, the amount
Of the next loan will be only $4,000. 0O0. 900
the right be reserved to allot over-sub-
scriptions.
1.-THE secretary will ask authority from
Congress to issue bonds bearing interest
at the rate Of AZ per cent. per annum.
acceptable at par and accrued interest in
payment Of United States inheritance
taxes and having the benefit Of a sinking
fund of Ave per cent. annum during the
period Of the war and for one year there
after.
1T Is the belief of the secretary that
the rate now proposed is sufficient and
that, by restricting unnecessary capital
issues and by inducing the people who
subscribe for Liberty bonds to save them
and keep them for investment. by pur-
chases with the sinking fund from those
who find themselves compelled to sell,
further increases in the interest rate
may be avoided. In order to put an
end to the expectation Of higher interest
rate, 1t is proposed that conversion privi-
ieges shall be- eliminated from the new
bonds, but the holders of Liberty bonds
Of all existing issues will be given an
opportunity to convert their bonds into
the new four and one-fourth per cent.
bonds.
"In addition to the foregoing principal
items Of the proposed program, Congress
will be asked for authority to issue bonds
to the amount of $4,000, 600. 900 in addition
to those now authorized. in order to
provide for future issues; for authority
to issue additional treasury certificates
Of Indebtedness: for authority to make
additional loans to the allied govern
ments during the summer. and for author
ity to deposit income and excess profits
taxes with national banks. State banks
ted States in the same manner as the pro-
ceeds of the Liberty Loans.
II am sure that the people will respond
to the third Liberty Loan with the same
loyalty and enthusiasm that character
lied their support of the first two loans.
The great events now happening in
France must fire the soul Of every Ameri-
can with new determination to furnish
all the dollars and all the material re-
sources Of America that are needed to
put an end to the execrable atrocities
Kaiser. Let US hasten 1t by asserting
Americas might with increased vigor in
concert with our gallant comrades"
Most financial observers were sur
| prised at the comparatively small size
| Of the loan. and at the interest rate,
both of which they had expected to be
higher. Reduction Of government expep
ditures and allied loans below the for
| mer estimates is responsible for the loans
size, Secretary McAdoo explained. He
said the bonds were made non convert
| lble to put an end to expectations Of
higher interest rates in the future. indi-
eating his purpose to maintain the four
and one-fourth rate for future loans
Legislation will be drafted tomorrow
by Chairman Kitchin of the House ways
and means committee to provide for an
additional bond authorization of $500,
100000 more than the $3,66e. 100000 sum
already authorised but unissued for the
increased interest rate for continuance
Of loans to the allies this summer and
| for issuance of more than the 81. 900. 900, 900
| certificates Of indebtedness now author
lied. An effort will be made to rush
this legislation through both Houses this
| week so that final plans may be made for
the third Liberty Loan and the engrav-
ing of the bond faces by the first of next
week. No opposition to the legislation
Is looked for In either House.
The necessity for further authorization
for certificates of indebtedness arises
from the fact that about 1850, 200, 900
already are outstanding and the treasury
plans to issue more than $1,0OO 900 more
| before the third loan closes, while the
maximum authorized under the present
law is $4,000. 100000.
J Credits to allies now amount to "a, 900.
100000. and about $1,000, OOO. 900 authorized
loans yet remain to be executed This
would not be SUFFICIENT to continue the
rate Of $500, 100000 a month through the
summer months, and consequently an
additional authorization Is asked by Sec
rotary McAdoo. The amount Of this will
be determined by Congress.
The legislation to deposit tax collections
with banks 10 sought as a measure 10
prevent big Accommodations of funds in
the treasury when taxes are due in June
Most officials believe that despite the
low goal set by Secretary McAdoo. ac.
tual subscriptions will far exceed ga.
000.000.000. The first loan of $4,000.
100000 WAS oversubscribed by NOR.
than $1,000 100000. but none of tn,
oversubscriptions was accepted. Tn,
second loan was for a minimum of s3..
00.00O.000 and only one-half of the 81 ;.
617,000.000 oversubschiption was taken
The first bonds mature in thirty years
but may be redeemed at the call Of tn,
treasury In fifteen years.
The second bonds mature in twenty
i've years but may be redeemed In ter