The Birmingham age-herald., 1919-02-19
SHORT TERM NOTES
 WOULD BE OFFERED TN THE VICTORY LOAN
 UNDER NEW PLANS
House Ways and Means Committee Would Fix Terms by Legislation h. stead of Giving Power
 Asked by Glass
Rv Associated press

Washington, February Is. Short term notes, maturing in from one to five years, would
 be offered in the forthcoming Victory Liberty. Loan campaign instead of long term notes, un- der a tentative agreement reached today by the House ways and means committee to fix the terms of the loan by legislation rather than to give Secretary Glass wide discre- tionary powers to determine them, as he had asked. At the same time, Secretary Glass, in
 a statement explained that the inten- ducted as planned, regardless of the l terms arranged by Congress and that it would start not later than April q. The secretary had asked Congress for {, authority to issue either bonds or notes as market conditions at the time might warrant but members of the commit- tee concluded that new loan issue would necessarily carry with it such high rate of interest that financial
 markets might be adversely affected for sometime.
 Under the tentative agreement of the committee, reached in executive Cn Lehingwell of the treasury was present, Secretary Glass would be given discre- ton of issuing any one or several of four kinds of notes to be prescribed by the legislatiou.sTh The quantity of these non-negotiable securities would be lim- ited to probably $7,ooo, o0o,o00, of which the treasury now plans to issue only
 about $6,oo0, 100000.
 FEATURES OF NOTES The principal feature of each of the
 four kinds of notes proposed would be as follows:
 one class would be at a low rate of interest, possibly per cent, and ex- empt from all federal taxation; one ! would be at comparatively high rate, possibly per cent and subject to all federal taxes; "a third would bear a moderate rate of interest-4N per cent was suggested-and be exempt from normal income tax levies; the fourth would be exempt from taxation up to a certain amount.
 These terms have not yet been de- fined, but treasury officials said the proposed alternatives would satisfy | the treasury department. They cover | all the possible terms which the treas ury might choose even if it had broad discretion, it was explained. In de- nomination the notes probably would correspond with past Liberty Loans,
 ranging from $50 up. Members of the committee felt this would permit of l as wide a sale as in previous cam paigns, as the short term notes would prove more attractive to the small in- veStors.
 The ways and means committee also decided tentatively not to increase the authorization for issuance of bonds from about $5,000,000,000 to $10.000.- 900, ,000. This means that the treasury still would have power to issue up to | $5,0O0.000. 900 in Liberty Bonds at the Az per cent rate of the last two loans and with the same terms. Most of l ficials believe that these securities could both be floated advantageously under new conditions and consequent ! ly that the treasury would not use any I of the remaining authorization at this time. It is possible, however, that some
 
 ! convertible in the next three or four
 years into Liberty Bonds of longer ma turity
 I The draft of the proposed legisla- | tion for the short term notes was or
 dered by the committee and it's experts
 began immediately to consider tho plans for the new measure. It is ex-
 pected to be completed in a few days, | with final action to be followed short ly by the committee. When the com- mittee's report is completed efforts will be made by Chairman Kitchin to expedite passage of the legislation be- fore the adjournment of the present Congress.
 GLASS ISSUES STATEMENT 1 Secretary Glass statement, issued to-
 night after announcement of the ways
 and means committees action, follows:
 'AThe Victory, Liberty Loan campaign will begin not later than April 21. l The requirements of the treasury are
 imperative and cannot be financed with | out such a campaign. The form and 1 terms of the securities to be issued remain to be determined. Whether they be bonds or notes. it is absolute
 ly essential that the widest possible
 measure of distribution be realized i This will necessitate a campaign of l the same character as that conducted 1 in the past through the existing Lib 1 erty Loan organizations. They have l pledged again their united support in 1 order that the Victory Liberty Loan l bonds or notes may be distributed as widely as possible among the Ameri- can people"
 This. furnished the first official no- tice of the date of the campaign and disposed of reports that an issue of notes would be floated mainly among bankers. rather than the general pulp lie.
 Even if Congress finally adopts the tentative plans of the House commit- tee, the treasury's plans for the next loan will not be materially changed. officials declared. Secretary Glass had i intended to make the bonds of short maturity, but had asked for authority to issue up to $10,000, ,00o.00 of notes in addition. rates and other terms of lpotn Donas ana notes to be determined by the treasury under blanket author
 ity by Congress.