New-York tribune., 1918-02-21
McAdoo Fixes Rate for
So, ,5OO,OOO,OOO Of
Certificates
Next Liberty
Loan in April
Higher Interest Than Last
Time Indicated by Sec
retary's Action

w AOtllNGlO.N, req. -u.--f ululC is
sues of Treasury certificates Of indebt-
edncss planned in preparation for the
third Liberty Loan will bear an interest
rate of Az per cent, or u per cent
more than issues of the Immediate past.
This announcement was made to-
night by Secretary McAdoo, together
with the statement that .he S500,o00o00
block of certificates. closed last week,
vas subscribed in full only because
banks In New York and other big fnan-
cial centres had taken more than their
share and Offset the scantY subscrip-
tons from the rest of the country.
About $500, 100000 in certificates re-
main to be issued at the higher rate
before the third loan campaign, prob
ably in April. and the rate for all will
be Az per cent.
Indication for Next Loan
This increase in the rate offers an in
dication of the Treasury's perspective
on money market conditions which may
affect the next Liberty Loan. The sec
ond Liberty Loan, issued at per cent.
was preceded by several issues of GER
tiAcates at 31a per cent. but this rate
was increased to per cent for the last
blocks before the second loan. SINH
lar situation preceded the first loan,
which was at 3l2 per cent In both
cases the interest rate Of the loan was
the same as the rate on the last issue
of certificates preceding.
Announcement of another issue Of
certificates, part Of the So 900 600
certificate programme in which banks
have been asked to participate by ap--
propriating ! per cent OF their total
resources weekly for purchase Of the
certificates. is expected within another
week. The last block was announced
two weeks ago, and it was said then
that others would be offered every two
weeks.
Receipts from the last issue have
swelled the net balance in the Treas
ury to S916, 1921 900 to-day. and dis
bursements recently have been about
S40,000,000 q day.
Larger Banks Exceed Share
Although the number of banks sub
scribing to the last issue Of certiti-
Gates was twice that for the preceding
block. Secretary McAdoo said, "the
amount of subscriptions from the
country at large was distinctly
disappointing" The subscription of
the entire amount offered, said
the Secretary, "was due to the
patriotic action of the larger banks
in financial centres. notably New York,
in taking more than their share Of the
issue, and thus making up the def
cheney which arose from the failure of
other banks to respond to the request
made of them"
Only the New York and Kansas City
Federal Reserve districts exceeded
their allotment. The Minneapolis DIS
trict equalled its allotment.
1t was disclosed by the Secretary's
announcement that some banks failed
10 respond to the Secretary's appeal
two weeks ago to lay aside at least
per cent Of their resources weekly Tor
ten weeks, to invest in certificates.
Another telegram is being sent to each
of these banks, and the request will be
followed up by the Treasury and
through the Federal Reserve Bank or
carnations.
Secretary Suggests Excuse
Secretary McAdoo suggested that the
failure of many banks to subscribe for
the last issue to the extent requested
may have been because of the short
time they had to prepare, or because
they failed to understand that ] per
cent of their resources was sought
weekly, making 2 per cent to be in
vested in each of the bi-weekly issues.
The Secretary added that the pro-
gramme of setting aside per cent a
week was the minimum action re-
quested, and that many banks we're ex-
pected to do better.
Holders of the 312 per cent bonds
OF the first Liberty Loan may convert
them into any future issue at higher
rate of interest, and the per cent
bonds of the second loan, or converted
@12s. may be exchanged for bonds Of
the third loan only, unless Congress
provides otherwise.
Secretary McAdoo already has Con-
gressional authority to issue SO ,666.-
100000 more Liberty bonds, at a rate
10 be prescribed by him. 1t Will be
necessary for him to obtain legislation
for additional issues if that amount is
TO be exceeded foi the third loan.