The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-02-21
VICTORY LOAN
PLANNED FOR
RICH AND POOR
Two Form Method Urged as
Best to Float Issue of
$7,OOO,OOO,OOO.
APPEAL MADE TO ALL
Tax Free Bonds Paying 1874
Per Cent. Called Need
ed Feature.
CHANGE DUE IN HOUSE
Exemption Up to $4,000 on
Securities Returning Higher
Interest.
CHANGE DUE IN HOUSE
Special Despatch TO THE sux.

Special Despatch TO THE suS.
WASHINGTON, Feb. 20. The Ways
and Means Committee has reported !
in favor Of the compro-
mise plan for floating the next obliga- |
tions of the. United States.
The short time left to authorize the
fiotation Of more Federal securities
was the compelling motive in bringing
about the unanimous report of the
Ways and Means Committee in favor
Of the compromise between the Ad-
ministration suggestion for vesting
complete authority over the conditions
Of the next sale OF bonds or notes in
the Secretary Of the Treasury and the
Congressional plan to block extension
Of further arbitrary powers to the ex-
ecutive branch OF the Government.
AS a result of this situation when the
expected that n substitute plan will be
offered, and that 1t will receive strong
support from Republicans and Demo-
Gratis alike This plan in brief provides
for the issuance of Federal notes matur-
ing in one to five years under either
or both OF these conditions:
A az per cent. bond or note COM
pietely free of Federal taxation OF any
sort
A a., per cent. bond with the income
from $4,000 to each purchaser exempt
from taxation and the balance of the
income subject to income taxes. income
surtaxes and war excess profits taxes.
Substitute Is Favored.
When the House discusses the authori-
ration Tor issuing Government obliga-
tions 10 total $1,000. .o0o, 900 In addition
to those now eXtant this substitute will
be suggested, probably by members OF
the Ways and Means Committee It is
entirely possible that this suggestion will
supersede tie comprom mise measure pre-
pared by the Treasury. Department and
accepted by the committee.
by this method It Is believed that an
! attractive investment will be offered to
rich and poor.
1t vas learned to-day by THE SuN
correspondent that in the compromise
plan permitting issuance of notes under
any or all OF four differing conditions
an agreement was reached between rep
ressntatives of the Treasury Department
and members of the Ways and Means
/ Committee that not more than two of
! the conditions would be put in effect IL
the plan became the law of the land
! The substitute for the compromise
plan has the added strength of embrac-
| lrg but two alternatives and II is be-
lieved by members of the Ways and
Means Committee that adoption of the
substitute would operate to lift instead
OF depress the market price of earlier
issues OF Liberty bonds.
safeguarding of Prices.
Safeguarding the sale price OF the
first, second. third and fourth Liberty
Loan issues has been one of the greatest
/ problems It has been necessary to con-
! sioer in arranging the terms under
| " hich further Obligations OF the Federal
Government might be sold. The sug-
Cested substitute for the Ways and
Means Committee compromise plan Is
expected TO take care of that part OF
the situation.
nection with selling additional obliga
tions of the American Government has
teen and still is the explanation to the
American public generally of the reason
for shifting from bonds to notes 10 has
been suggested in the secret conclaves
OF the Ways and Means Committee tha,
the proposed issue OF obligations be
labelled bond or note" The idea OF
this is to overcome the prejudice of the
small buyer of paper OF this issue the
great majority of whom have only re,
Gently learned the meaning OF a Gov.
ernment bond and what It stands for.
1t is feared that the words Liberty
lttunds'~ have beer-so firmly iffhressed or
the minds of the small purchasers thai
the sudden change to Issuing note.
without laborious explanations that tht
credit OF tine American Government /.
behind them will check investment II
this paper by the millions of men ant
women who put their savings In tn,
bonds sold under the stimulus OF patrio
: tic fervor.