The sun., 1919-02-19
Special Dsspafch 10 THE srs.

WASHINGTON, Feb. 1s.-The Treasury
and Means Committee and Congress
itself will refuse the broad powers
sought by the Secretary OF the Treas
ury in fixing the interest rate and
other factors of the expected issue Of
Liberty bonds. to-day submitted to the
Ways and Means Committee in secret
session its compromise plan for fnanc-
ing the Government in the immediate
future.
The plan in detail THE Sun is able
to present herewith. 1t would provide
for an issue of notes instead of bonds.
the total authorization fer the notes
being 81. 900. 100000 These notes would
be of the short term kind, maturing in
from one to FIVE years. with the Secre-
tary OF the Treasury having the right
10 fix the interest rate.
Advantages In Note Plan.
On the various classes OF notes the
Secretary of the Treasury would have
the right TO fix varying interest rates
under the Treasury Department plan.
This, it was explained, would make one
class OF notes attractive to one class
of investors and another class more at
tractive to another class.
Unsettled and changing conditions ex-
listing now, the Treasury Department
argued TO the committee. would make the
temporary financing plan. through the
issuance of notes as money is required, a
better one than issuing another big bono
Issue when II might have to be made so
attractive that the market price OF for.
mer issues would he forced down. Later.
II was pointed out. when conditions are
more favorable the bond issue could lie
made
The Ways and Means Committee
probably will reject the original bond
plan OF Secretary Glass, which lodged
wide discretion in the Treasury, but the
committee Is expected to approve the
latest proposal for the issuance of short
term notes. Experts OF the committee
already are at work drafting plans for
the new legislation, and these will be
presented Immediately upon completion.
The committee will meet again to-mor-
row.
The Treasury Department. II the plan
Ways and Means Committee and then by
'-rrie HouseSAl Senate. plansF~> 4gtrs-A
issuance OF notes early in April.
Protection of Previous Issues.
Assistant Secretary of the Treasury
Ieffingwell was before the committee to-
day explaining the Treasury plan. The
committee was particularly anxious
about the possibility OF depressing prices
Of former issues OF Liberty bonds and
suggested that IL authority was given
10 the Treasury Department to Issue the
81. 900. 100000 in notes at rates fixed by
the Secretary of the Treasury provision
should be made for permitting the con-
version OF old Liberty bonds into the
new certificates. This Mr.. Leffingwell
dsspproved on the ground that it would
not be feasible.
The necessity for taking some definite
action quickly was brought to the fore
again tonight when the Secretary of the
| Treasury issued statement declaring
that the campaign for the sale of the
Government obligations must be started
not later than April 81. Said Mr.. Glass
"The Victory Liberty Loan campaign
will begin not later than April 21. The
requirements OF the Treasury are i'm
perative and cannot be financed withou,
such a campaign. The form and terms
OF the securities to be issued remain ia
be determined. Whether they be bonds
, or notes 1t Is absolutely essential that
| the widest possible measure OF distribu.
! ton be realized. This will necessitste a
campaign Sf' the same character as TIA,
conducted in the past through the exist
/ ing Liberty Loan organizations. They
have pledged again their united support
in order that the Victory Liberty Loar
bonds or notes may be distributed az
widely as possible among the American
people"