The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-05-05
LOAN DRIVERS PLAN
WHIRLWIND FINISH
Carnival Parade, Whistles,
Sirens and Meetings to Stir
Laggard New York.
STRONG SOUNDS WARNING
Shows How Failure Will Keep
Up High Prices and Rctard
~ Business Revival.


Complete fluctuations yesterday for the
nrst two weeks OF the Victory Liberty
Loan, and with only one week left
showed that the New York district had
subscribed total OF only 1915. so6.250,
or less than 2s per cent. OF its quota.
Benjamin Strong, governor OF the Fed
efal Reserve Bank and chairman OF the
Liberty Loan committee OF the Second
Federal Reserve District, issued a state
nnent last night that was both an adj
mission that the loan was far behind
expectations and an explanation of some
of the underlying causes for the lack of
popular support.
Mr.. Strong directed particular atten-
ton to the general belief held by the
man in the street that the shortage
would OF a certainty be taken up by the
banks during the closing days OF the
drive This belief has been one of the
hardest handicaps that the loan work.
ers have had to overcome. Mr.. Strong
pointed out that IL tho banks are COM
PEELED to take UP what appears may be
q substantial shortage the result will be
acontlnuance of high prices and possible
Industrial unrest because of the neees-
sity for the banks to curtail their leglti-
mate credits for the expansion of indus
try and commerce. Curtailment would
delay the reduction OF the number of
trrA nnlA
better business conditions generally.
The chief points made by Mr.. Strong
in his statement are:
That in volume the loan for the New
York district is some s11.46S,o behind
the figure for the same period In tho
Fourth Liberty Loan. .....
That the total individual subscription
reported to the Federal Reserve Bank is
approximately $4,000 short of what IT
was for the same period of the last loan
and that the coupon books sold to date
for the Victory Loan are less than half
OF the number sold during the same time
In the Fourth Liberty Loan campaign
That there is a serious and discourage
ing indication of lack OF popular interest
In the present loan.
That II the banks find II necessary to
take up any substantial amount OF the
present issue an extended period of high
cost OF living will result.
Frank Statement of Facts,
Mr.. Stroug's statement follows: e.
The members of the Liberty Loan
organization believe that the best public
uy for the loan are the facts and that
the greatest derriment to the loan are
the assumptions.
las to the facts: Total subscriptions
nled to this date for the Second Federal
reserve District aggregate 1915, 9O6. ESQ,
being 2I.9 per cent. of the quota for the
district. After the same number of days
IN the Fourth Loan the total subscrip-
tfons were S5l3,797. 400 or 2S5 per cent,
the comparison showing that we are SILL
4SS.000 behind what we should have
done to this date in order to maintain
the same pace as in the Fourth Loan.
This figure in itself is not so dis
couraging as are the figures showing in
divldual subscriptions. A compar ison OF
subscriptions handled by the organiza-
tion in New York city shows a big de-
cline in the number OF subscriptions IN
comparison with the Fourth Loan.
I'm the present campaign the totai
number of subscriptions reported to the
serve Bank is 12O,930, as compa red with
ls4,S6S for the same number of days OF
the Fourth campaign. The sale of cou-
pom books Is still more dlscouraging For
eleven days of the campaign 7l,S72
books have been sold. whereas In the
Fourth campaign in the Same number
of days l45.S coupon books were sold.
This is a serious and discouraging in
dication of the lack of widespread public
interest in the loan. We know that some
of the largest subscribers to former
loans are unable 10 file as large sub
scripticHs for this loan and the short
ago must be made up by a more wide
spread distribution and by a larger num-
Der OF sales. And to accomplish this the
public must be aroused to "a full concep-
ton of Its patriotic duty.
False Assumptions Corrected.
As to the assumptions: The prin-
eipal and most damaging one IL the
idea that as this is an issue of notes of
comparatively short maturity it win be
taken by the banks. We're the banks TO
subscribe for this loan instead OF the
public It would mean an expanded bank
position, n continuance OF unduly high
prices and an impairment of the ability
OF the banks to furnish credit for the
country's industry and commerce, which
would be an unfortunate IL not a Sc
rious development at time when it is
40 necessary to keep labor employed and
business at a normal volume
Another assumption which INJURIES
the loan is that there is some difference
between a Government obligation called
a note ard a Government obligation
called a bond" They are Identical in
every respect including negotiabilIty
and security. They are the unqualified
obligation of the Government, and rest
for certainty Of payment of principal
and interest upon the power OF the
Government to levy taxes. And there
will always be a wide and ready market
for them until they mature and are
paid of
still another mistaken assumption Is
that these Liberty Loan campaigns are
expensive. They are the most econom-
ical financial operations of such magnI-
tude ever conducted in Government
finance. The selling cost TO the Gov
eminent of placing all issues of Gov
eminent bonds in the Second Federal
Reserve District up to the present time
does not exceed one-twelfth OF per
cent. of the face amount OF bonds ac-
tually sold, and this cost would repre-