New-York tribune., 1922-10-09
First Popular Issue Since
War Is to Refund Debt;
Carries 4Hao Interest
and Runs 25-3O Years
Some Exemption
From Taxation
VictoryNotes Tenderable: !:
treasury Sees No Need
OF Campaign for Sale

eiHie IN -FOUR years since the war ended.
IS asked to-day to subscribe to a bond
issue OF the United States government.
Andrew w. Mellon, Secretary Of the
treasury, has fixed the term Of the
ioan' which represents the first long
term financing of the governments pro-
gram Tor refunding the war debt. AZ
twenty-five to thirty years, and will re-
ceiye subscriptions up to total of
$6o0,oo0,oO0 or thereabouts.
Despite the decline in open market
rates Tor money as compared with
those obtained during the war period,
the subscriber to these bonds will re-
ceive the same interest, Az per cent
annually, as was carried by the third
and fourth Liberty loans. The secre-
tary agrees to allot in full all sub
scriptions of $4,000 or less and pay
ment will be permitted in two INSTALL
ments, the first due October 16 and tho
second November is.
Victory Notes Tenderable
Victory notes, both called and IN
called, are tenderable in payment for
the loan, as are the Treasury Certifi-
Gates or Indebtedness maturing Decem-
Der ID. The amount of Victory notes
outstanding which have been called for
redemption December rs is approx
mately $S70,000,000, while those which
will run to maturity aggregate almost
Sl,O00,0O0;000. The two series Of GER
tificates falling due this year, bear
ing interest, respectively, at 31a and
an per cent, amount together to $780,
100000. Thus the securities which NAV
be presented in exchange for the new
bonds total $1,300,000,0 1000.
The new bonds will be EXEMPT from
all taxation excepting estate and in
hentance taxes up to $4,000 in prin-
ctpal amount. They are exempt in any
aamouiit from state and local taxes and
from the normal income tax of the
United States, but larger holdings than
$4,000 are subject to the sur-tax on
incomes and to any excess profits and
war profits taxes which may be i'm
posed by the United States.
The minimum term Of the new bonds,
which will mature in 1852 but will be
callable in 1947, is fourteen years
longer than that Of any Liberty bonds
now outstanding. OF these the fourth
Liberty ~ per cent bonds have longest
to run, being callable in 1888, which
makes their minimum term eleven
years.
Larger Issue Expected
Tie size OF the issue is smaller than
had been generally expected in the
financial district, although it Is recog-
nized that the Treasury Departm ent
reserves the right to allot bonds con-
siderably in excess of 100000, ,0OO., A
subscription Of more than 81 ,0O0, 900 900
would occasion no surprise in view of
the probable appeal Of Twenty-Five
year An per cent United States gov
ment security. Allotments, it is
thought, may reach as high as $780,
100000 or s80o,o00,0Oo.
The loan is expected to appeal par
ticularly to life insurance companies,
savings banks and other institutional
buyers with large amounts of funds to
invest. The aggregate of subscriptions
accepted, however, will depend, it is
believed, largely on the volume Of small
cash subscriptions which the Secre-
tary has agreed to allot in full and
in the amount of outstanding securities
offered in payment.
Calculations Of bankers that the gov
ernment would seek to borrow at least
$1,000, 100000 were based upon the ma
turtles that must be met during the
present fiscal year. When Secretary
Mellon announced on April so, 1921,
his refunding program he gave the
total of the debt to be met or re-
funded within the subsequent two years
as $1,000, 100000. OF this, $4,000 O,00O,-
900 has been retired or refunded,
mainly through the sale Of short-term
notes maturing over the next four.
years. The $4,000, 100000 remaining to
be met before June 80, 1923, is divided
as follows: Treasury certificates of
Indebtedness, $1,10o, 400 GOO; Victory
notes, $1,000, 100000. and war savings
stamps and certificates, $625,000, 900.
In connection with the last require
(Conttnued a nana foi,rl