New-York tribune., 1919-04-17
institutions to Garry Sub.
scriptions to New Issue
at Interest Rate of 4 Sd
Per Cent for Ninety Days
Explains E Bond Limit
Oversubscription Decided
Against Because Urgency
Is Gone, Says Chairman

The banks of the New York Federal
Reserve District will loan money to
purchasers of government notes in the
Victory Loan at 4s4 per cent The
Liberty Loan Committee announced
yesterday that it had recommended
that the banks carry subscriptions to
the new issue at an interest rate Of AZ
per cent for a period of ninety days,
beginning May 20, with the privilege
of one renewal for three months at the
same rate. In the fourth loan cam
paign, the banks similarly arranged to
lend money to purchasers of Liberty
bonds at the same rate of interest the
securities bore.
The Treasury Department called at
tention to the fact that under the
Victory Loan act person may hold
up to $4,000 worth of bonds of the
second, third, and fourth loans with
interest received after January |
1919. exempt from surtaXes, excess
profits and war profits taxes on con-
dition that he hold at least one-third
as many Victory Loan notes. In ad-
dition to this. all interest, but not the
worth of bonds of the previous issues
Will be tax exempt for FIVE years This
exemption is in addition to previous
exemptions and was made in the new
loan act
Benjamin Strong. chairman of the
Liberty Loan Committee, speaking at
a luncheon of the Bond Club at the
Bankers Club, gave the first official
explanation of the reasons why Sec
retary Glass decided not to ACCEPT any
eoversubscriptions in the Forthcoming
loan.
First he said, at meant that the
borrowing programme of the govern
ment, which had necessarily been
upon an ascending scale during the
period when we were expending our
war effort to the maximum, could now
safely be changed to descending
scale. 1t was that primary fact that
led to the decision to limit the loan to
$4,000, 900 900
The next consideration was to in
sure right distribution to the right
KIND OF buyers, IN order that the over
subscription might result in cutting
down also the right class of buyers.
1he decision which Secretary Glass
made was dependent entirely upon his
confidence in the great Liberty Loan
organization continuing to function.
In other words, if we could effect such
q wide distribution of the bonds of
TINS issue to investors of the class
that buy moderate amounts of the az
per cent notes, necessarily the larger
subscribers will take the 3A per cent
notes, and the large subscriptions will
be the ones 10 be reduced.
II emphasize that simply to remind
you once more that the problem we
have faced in every one of these loans
has been without exception the immc-
dlate discount at which the loan sold
after II was issued. IT, therefore. bv
your efforts. blythe efforts of the or
ganization throughout the country. a
Widespread distribution can be effected
Of the 424 per cent notes, those un-
fortunate rich people who buy tax ex-
empt notes have got to coax the hold
trs OF the Az per cent notes to sell
them II they are going to get all of
the 39l notes that they want"
Rear Admiral Sims also spoke at this
meeting.
A new artistic feature of the cam
palgn Will be a chronological history
OF the war presented in the store
windows along Fifth Avenue from
Fifty-Ninth Street to the Victory Arch.
on paintings and sculpturcd objects
viii tell 800 stories, some Of which
have been suggested by Secretary
Daniels, Secretary Baker and generals
Of the line. The value of the dis
D!aV is estimated at S3OO OOO