Evening star., 1927-05-09
The Second Liberty Loan.


Secretary Melons call of all out.
standing bonds of the second Liberty
loan, when those bonds might under
the law run until 1912, can only be
regarded as an indication Of the faith
which the Government has in the
stability OF financial conditions in the
United States. The retirement of the
second Liberty loan bonds in 1927
was made optional in the law author
izing them. The law specified. how
ever. that six months notice must be
!. given the boudholders of the proposed
b retirement OF the bonds by the Gov.
ernment. So Mr. Mellon has an
nounced the call for November Is
next. 1r the meantime, the hundreds
given notice that on that date inter.
est on the bonds will cease. They
have the option either OF presenting
them for redemption by the Govern
ment or OF substituting them for other
Government securities. about which
Mr.. Mellon will make a subsequent
announcement.
Refund and repayment of the Gov
ernment leans made for war purposes,
when the United States was rallying
all its resources at the time OF the
World War, has been one of the
miracles Of the postwar period. The
;, march toward the redemption of its
pledges has been continued by the
Government without a single back
ward step. Much OF the credit for
the Government financing during the
last six years must go to Mr.. Mellon.
whose directing mind and financial
genius have been largely responsible
for the program. The country has
confidence in Mr.. Mellon and in his
judgment in money matters. This lat
est decision of his, to call the out.
standing bonds of the second Liberty
loan. totaling nearly $1,70o, 900 900, is
a bold stroke. These bonds, original
]y- bearing 4 per cent interest, but
for the most part converted to bonds
hearing Az per cent interest under
the provision of the law which per-
mitted their conversion provided any
additional war loans bore higher rates
of interest, were subscribed to by nearly
100000 persons. 1t is doubtless true
!. that many of the bonds have passed
from the hands of the original pur-
I chasers. Many of them are held now
in large blocks, by men and women
of wealth, by corporations and busi-
ness houses. The effort of the Gov
ernment, in advertising the call Of
the bonds, however, will be to reach
particularly the small bondholders
scattered in all parts of the land, so
as TO protect them against the loss
of interest OH their loans after No
vember Is.
The call of the second Liberty loan
bonds is more than bold gesture on
the part of the Government. 1t means
a saving to the Government of mil
lions of dollars of interest, and in turn
a saving to the taxpayers of the
country, out of whose pockets the
Government must have taken the in.
fsrest.
The decision Of the Secretary of the
Treasury to call the bonds of the sec
ond Liberty loan is all the more
significant in view of the fact that
Nfi1e bonds of the third Liberty loan,
$4,000 900 600, mature November Is,
1928, and mus be paid. Mr.. Mellon,
1t is apparent, believes that the Treas
sury Department cannot only handle
successfully the refunding of the third
Liberty loan year and half hence,
but that in the interim it can deal ef-
fectually with the second Liberty
loan. The confidence of the Secretary
of the Treasury doubtless will be re.
fected In the attitude of the American
: business world