New-York tribune., 1919-02-14
Power Asked bv
Glass to Fix
Loan Interest
Secretary of Treasury Says
Rate Should Be Based on
the Conditions in April
5 e eek $ Tax Exemption
Tells House Committee Next
Issue Must Be Attractive:
Wants Alternative Plans

WASHINGTON, Feb. Secretary
Glass to-day told the House Ways and
Means Committee that it was apparent
something must be done to make the
bonds or notes of the Victory Liberty
Loan more attractive than their prede-
cessors, and asked that Congress give
him authority to fix interest rates and
determine exemptions from taxation
according to financial conditions exist
ing when the loan is toatcd in April.
The head of the nations financial
system also urged that authority be
given the War Finance Corporation
to make advances to exporters not to
exceed $1,000, 100000, and that the pur-
poses for which the Treasury NAV
make loans to foreign governments be
broadened Mr.. Glass said both pro
visions were necessary to restoration
of the country's foreign trade and
would be mutually helpful to this gov
ernment and the Allies.
$4,000 100000 Certificates Unissued
Mr.. Glass told the committee that at
the rate disbursements were being
made it was apparent that only radi-
cal reduction in the remaining months
OF the fiscal year could bring the years
expenditures within the $4,000. GOO 900
which former Secretary McAdoo had
hoped would cover the governments
expenses Cash disbursements during
the first ten days of February showed
q very gratifying decrease" but Mr..
Glass pointed out that heavy payments
on informal war contracts were BEING
heId IN allegiance until Congress acted
ON pending legislation affecting them
Under these circumstances and with
a floating debt of $5OOo.CO0,O0o in
treasury certificates, in ,reasing approx
matelv $1,4O0,0o0,0C0 month. he
thought the committee would not be
surprised by mis- recommendation fer
authorlzatlon Of an additional $1,000
O00,0O0 issue Of bonds. There remain
umssued under previous legislation
llghtly IN excess of $3,000,000000
1T IS needless to say that the treas
ury does not contemplate the issue III
connection with the Victory Liberty
loan of any such amount of bonds as
$4,000, 900, ,000," Mr. Glass said, adding
that ut seemed wise TO suggest an in
crease to figure which would seem 10
represent the maximum possible
amount of the bonded debt growing ont
Of the war"
Suggests Alternative Issue
As an alternative issue of bonds he
suggested authorization of an issue
OF notes limited to $4,000 900, ,001 and
an increase in the maximum amount
of Treasury certificates from $4,000
100000 to $4,000, ,000,0 900, not that
the three items should be at all cumu-
lative but that the Treasury should
have the power to finance the govern
ment's operations in the most econom-
iacl way
ut may be desirable to adopt all
of these methods in succession" Mr..
Glass said. "Conditions in April
might be such that it would be wise to
issue d shOrt-time note bearing a rcla-
lively high rate of interest and carry
ing with it the privilege of conversion
into bonds bearing interest at q lower
rate and having a longer maturity. On
the other hand, it might be desirable to
make an alternative offer of bonds
ana HoleS, lcaVlng the subscriber a
choice between the two
II am by no means convinced that
conditions viii be such IN April as to
nccessltate an increase in the interest
rate over that provided in existing law
to an important extent, if at all. Yet. if
were obliged to determine now what
Is the lowest rate at which | could nm
dertake with certainty to finance the
requirements of the government when
the issue is offered in April, should be
Obliged to name maximum rate much
higher than that which, if develop
ments are as favotable as expect thew
Will be in the interval, will, | hope, be
sufficient to float the loan
"Ihe floating debt, represented by
Treasury certificates now OUTSTANDING
and to be issued in the interval before
the Victory Liberty Loan is offered.
must be refunded, and bonds or notes
must be sold to an amount sufficient to
accomplish this purpose. To withhold
from the Secretary of the Treasury the
power to issue bonds or notes beariilp
such rate of interest as NAV be nee
essary to make this refundng possible
might result in a catastrophe. To
specify in the act the maximum
amount of interest at figure suffi-
clent to cover all contingencies would
be costly because the maximum would
surely be taken by the public as the
minimum"
Gen. Crowder Again Made