South Bend news-times. (South Bend, Ind.) 1913-1938, 1919-02-19
PROPOSE SHORT
TERM NOTES IN
PLACE Of LOAN
House Ways and Means Com
mittee Tentatively Agree on
the Terms of Victory
Liberty Loan

WASHINGTON. Feb. 19.-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
under a tentative agreement reach
ed Tuesday by the house ways and
means committee. 10 fix the terms Of
the loan by legislation. rather than
TO give Sec'y Glass wide discretion
airy powers to determine them, as ne
had asked.
At the same time Sec'y Glass in a
statement explained that the inten-
sive popular campaign would be
conducted as planned, regardless Of
the terms arranged by congress and
that il would start not later than
April 81. 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 committee con-
cluded that a new loan issue would
necessarily carry with it such n
high rate of interest that financial
markets might be adversely affected
| for some time.
Four Kinds of Notes.
! Under the tentative agreement of
the committee, reached in executive
session. at which Asst. Sec'y Letting
well OF the treasury was present.
Sec'y Glass would be given the dis
erection of issuing any one or all Of
four kinds of notes 10 be prescribed
by the legislation. The quantity of
these non-negotiable securities would
be limited TO probably $1,000, 100000 90
of which the treasury now plans 70
issue only about six billions.
The principal features Of each of
the four kinds of notes proposed
would be as follows:
One class would be at a low rate
Of interest, possibly four per cent,
and exempt from all federal taxa
ton; one would be at a comparative
! ~ high rate of possibly five per cent
and subject to all federal taxes; a
| third would bear a moderate rate Of
| Interest," IA per cent was sug-
gested-and be exempt from nor
NAL income tax levies; the fourth
would be exempt from taxation up
to a certain amount.
Range from so Up.
These terms have not yet been
defined. but treasury officials said
the proposed alternatives would
satisfy the treasury department.
/ They cover all the possible terms
which the treasury might choose
even if it had broad discretion, II
was explained. In denomination the
notes would correspond with past
Liberty loans, ranging from $50 IN.
! Members of the committee felt this
would permit of as wide a scale as
in previous campaigns as the short
term notes would prove more at
tractive to the small investors.
The ways and means committee
also decided tentatively not to in
crease the authorization for issuance
OF bonds from about $4,000 900
TO $1O.O0O.OO0,0OO This means that
the treasury still have power to issue
up TO five billions in Liberty bonds
at the IA per cent rate Of the last
two loans and with the same terms.
Most officials believe that these Sc
curities could not be fioated advan-
tageousIy under new conditions. and
consequently that the treasury would
not use any of the remaining author
izatiOn at this time. 1t is possible
however. that some of the notes ia
be issued would be convertible in the
next three or four years into Liberty
bonds of longer maturity.
The draft of the proposed legisla-
ton for the short term notes was
ordered by the committee, and its
experts began Immediately to con
slider the plans for the new meas
ure. 1t is expected to be completed
in few days. with final action TO be
followed shortly afterward by the
committee. When tn committee
report is completed, efforts will be
made by Chairman Kitchin to expe-
dite passage of the legislation before
the adjournment of the present con
gress.