The Bridgeport times and evening farmer. (Bridgeport, Conn.) 1918-1924, 1918-04-10
The World OF Finance
Third
Liberty
Loan
7lIuIIIIIIIIIIIIIIIIIIIIIIIIIlIuIIEIIIIIlIIIIIIf


The announcement of the amount
and terms of the Third Liberty Loan
has been well received, the dominat-
ing feeling being one of relief that no
greater amount is Required at this
time. After the talk about raising six,
eight or ten billions, the task of rails
ing three looks easy.
1t had been generally supposed that
the rate would be IL per cent, and
the decision to make it IA meets
some dissenting opinion, although
less than the announcement that there
will be no privilege of conversion in
to later Issues. The objections, how
ever, come mainly from the work
ers, who are thinking of the buying
arguments which they will have to
offer to the public. There are
weighty reasons other than the saving
to the Treasury for keeping the rate
as low as practicable, but as we have
seen the determining consideration at
last must be the rate at which the
bonds will probably sell in the open
market. For the purpose of STABILIZE
ing them the Secretary proposes a
sinking fund of five per cent. from
which purchases can be made from
time to time, which is the policy fol-
lowed in Great Britain. The decision
to make no provision for future con-
versions indicates an intention to
make a stand on IA per cent, as
the rate on all further issues, as the
British government has taken stand
on per cent. This position can be
supported on the ground that even
if it is found advisable to raise the
rate on future loans, everybody will
have an equal chance to share in
them, and that it is not necessary to
raise the rate on all past issues; or
Congress in it's discretion may here
after provide for the conversion of
past issues upon terms which require
the investment of new money. The
new issue is simply without promises
Of this kind.
Light on the Financial Problem
The most notable thing about the
announcement is that it clears up
much Of the misrepresentation which
has existed about the task of financ-
ing the war. The estimates footing
up approximately $4,000, 000,O0O re-
presented what the government
planned to spend in the year ending
June 80 next, and those figures have
been painted on the sky as the sum
Of money which must be raised within
that time. Nobody could see how it
might possibly be done, but in these
days there is no alternative but to
do what must be done. The only con-
ISOLATION Wy hoTrn hnnV1 10 f{,,I
was in the theory, often affirmed in
these columns, that we would surely
be able to pay ourselves for any
amount of work we were able to do.
In other words, the real problem was
not in providing the means of pay
ment, but in getting the work done.
The figures for expenditures from
month to month have indicated that
nowhere near $4,000, 100000 would
be disbursed in the year. but nobody
outside Of Official circles and prob
ably nobody in those circles, was in
position to know definitely what
might be done in the latter part Of the
year. At last, however, the situa-
ton is sufficiently clear for the Sec
rotary of the Treasury to know that a
$4,000, 100000 loan in addition to his
other resources will carry him
through. The total disbursements
from July 1 to Mrch 25 were S.
! 220, ,G3O, and at this writing are
running at a rate under $1,000, O0O,o
per month.
This outcome makes the whole SIT
uation more comprehensive. We are
down now, out of the clouds, and
have our feet on the earth. Such an
amount Of money as was named for
expenditure this year could not DOS
sibly be expended in one year with
out either a great contraction of pri-
vate expenditures or a great increase
in productive efficiency, and to what
ever extent these conditions may be-
come effective in the future we will
have the additional means REQUIRED.
In short, the war problem is first ar
Industrial problemf. The financial
ability required is dependent upor
and corresponds to the industrial ca
pacity. If we will develop and prop.
erly conserve the latter, there will be
no trouble about the former. Thi:
demonstration lights up the whole
problem of financing the war. It es
tablishes confidence. There is M
Ineed for alarm on the subject O,
iraising money; no occasion for doubt
full experiments. All that is required
is that the country shall not expec
or attempt to use the same labor ant
capital twice at the same time fol
different purposes. What it wishe,
to give to the governments service i
must not try to use privately.-Na.
tional City Bank, New York,