The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-03-26
NEXT LOAN FOR
3 BILLIONS AT
41-4 PER CENT
II Will Be NOn-COnvertible,
and OversubscriptiOns
Will Be Received.
PLAN no HIGHER RATE
Authority to Issue $780,
100000 Additional Bonds
to Be Sought.
PLAN NO HIGHER RATE
Specidi Despdfch TO The SrN.

wAsHrNoroN, March 25.--The third
Liberty Loan will be for only $4,000.
100000, with the right Reserved to allot
Subscription. The interest rate will be
-. per cent. and the bonds will not
te co7vertible. as were previous issues.
rae. Secretary McAdoo believing that a
maximum should now virtually be fixed
!or ali future loans
Formal announcement OF the terms
Cor the coming issue were made by Mr..
McAdoo tonight following a confer ,nce
with Chairman kltchin OF the Ways and
Means Committee OF the House and
co.ncident with the first stand OF the
American troops on the battlefields of
France.
Events have so shaped themselves
tat the Secretarys announce ment
comes at the psychological moment
uhen the American spirit Is aroused.
General terms and conditions of the
loan were not announced to-day. Just
what provision kAey will carry With re.
spect to tax liability has not been finally
determined. Il was said. Secretary Nc
.Adoo has been urged by many to make
the new bonds tax free like the first
issue.
Maximum, Rate Reached.
II was made plain. however. that the
Government with the ~ per cent. in
torest rate has reached the maximum,
figure to which II will go. The interes,
rate was a surprise. There was more
or less general expectation that 1t would
he ~ per cent This expectation was
based on the urging OF the big banker:
AID tinanciers and upon the Treasury
action in increasing the rate on Treas
nrr certificates OF indebtedness to I u
yer cent.
Secretary McAdoo has stood steadfast
against going to higher rates, taking the
position that the Government should not
lave TO compete for money to win the
oar and holding fast to the belief that
be american people were sufficiently
patriotic to keep the war chest filled
without bargaining for the last half per
cent. in interest.
The rate and other features were
reached by the Secretary after confer
ences with his aides and with the bank
Ing and financial interests of the country
as represented by Federal Reserve off,
tals and Liberty loan chairmen. II is
Understood that they favored a higher
rate The ~. per cent. rate was largely
compromise and serves to rid all fu-
tgre issues OF tho conversion privilege,
N1ich, it was urged in some quarters,
Implied future higher rates.
Though the right to allot any over
subs ription is reserved the amount OF
the loan is far under expectation. Sec
retarv McAdoo explained that actua
expenditures OF the Government and OF
the Allies have been much less thar
Vas indicated by the estimates.
Thc Governments position with re-
s2s't to the interest rate and future
'sues vas made plain by the followinf
Statement authorized by Secretary Nc
>>Adoo after conference with Mr.. Kitchin
Mr.. McAdoo's Statement.
\ statement wa. issued by Secretary
VI WOO az follows:
"The Secretary OF the Treasury In a
conference with Mr.. kitchin. chairman
ct the Ways and Means Committee. to-
day outlined his plan for the third Lib
e'ty Loan. Actual expenditures OF the
United states Government and or thf
allied Governments having been much
less than had been indicated by the esti'
mates. the amount Of the next loan viii
b. only $4,000 900 900. the right being
'es"rPed TO allot oversubscriptions.
The Secretary will ask authority
from Congress to issue bonds bearing in
ierest az the rate OF ~ per cent. pei
snnunl, acceptable at par and accrued
-'erest in payment Of United States in
heri'ancc taxes and having the benef
Of sinking fund OF 9 per cent. per an
mum during the period OF the war ant
Tor one year thereafter.
~ Is the belief of the Secretary tina
ne rate now proposed is sufficient. an'
ina, BY restricting unnecessary capita
'ssucs and by inducing the people whit
s1hs"rIDs for Liberty ponds to saw
-. and keep them for investment, by
hI'oHaeos with the sinking fund iron
nose Who find themselves compelled Il
"L further increases in the interes
le.c nay lie avoided In order to pu
'r 'ud to the expectation OF higher In
'"reS' rate II is proposed that conver
son privileges shall be eliminated from
'n' r@v bonds, but the holders OF LIB
cry 'oHds Of all existing issues will b
e'"' an opportunity 10 convert thci
o'u'' Ito the new !. per cents,
scope Of Authority sought.
T" edition to the foregoing pr.nci
'a ems OF the proposed programme
gross will he asked for authority I
p. q Ouds to the amount Of $4,000.
'''."'o ~ addition to those now au
.'r.('u. n order to provide for futur
Continued on Fitih PdOe.