Jasper County Democrat, Volume 20, Number 60, Rensselaer, Jasper County, 27 October 1917 — NEW LIBERTY LOAN 4 PER CENT BONDS ATTRACTIVE TO LARGE INVESTORS. [ARTICLE]

NEW LIBERTY LOAN 4 PER CENT BONDS ATTRACTIVE TO LARGE INVESTORS.

The erroneous impression has been created that the new Liberty loan 4 per cent bonds are not attractive to persons with any considerable Income. It should be understood that there are two taxes, the regular normal income tax, such as was paid last year, and the additional tax, which is to be levied during the period of the war. For the following computation the most unfavorable basis is used, that Is, it is supposed that the war will last five years, and furthermore, that the government will retire the bonds at the end of the ten-year option. If the war ends before five years, the return is greatly improved, and if the government allows the bonds to run after the optional period, which will undoubtedly be the case, the yield will also be improved. The method of computation is as follows: On an income of SIOO,OOO the present tax is 3.92 per cent The total tax, including the special war tax, will be 10.43 per cent, Thus for five years the bonds would net the investor having SIOO,OOO income, 3.34 per cent. For the five years following the bonds

would net 3.84 per cent, the war income tax being removed, making a total income for the period of 3.59 annually. So it will be seen that even with a SIOO,OOO income a 4 per cent bond is a better purchase than a 3% per cent bond. On incomes of a lower amount the income rate is higher, as per the following tablet On an income of SBO,OOO, the Income for the t’en-year period is 3.65 per cent annually. On an Income of $60,000, the income for the ten-year period is 3.71 per cent annually. On an income of $40,000, the income for the ten-year period is 3.76 per cent annually. , - . On an income of $20,000, the income for the ten-year period is 3.85 per cent annually. On an income of $15,000, the income for the ten-year period is 3.87 per cent annually. On an income of $12,500, the income for the ten-year period is 3.89 per cent annually. , On an Income of SIO,OOO, the income for the ten-year period is 3.93 per cent annually. 'On an income of $7,500, the income f or the ten-year period is 3.93 per cent annually. On an income of $5,000. the income

or the ten-year porior is 4 per cent innually. Furthermore. these bonds, being ex•hangeable Into, the next loan, that Dan must, like the other loans, he sold it par; so that this bond must con'Jnue to be worth par. For the above reasons it seems wise for the holders if 3% per cent bonds, instead of exehanging their bonds for the new 4 per cent bonds, that they offer their bonds for sale at par and buy 4 per cent bonds with the proceeds, thus largely increasing the subscriptions of tin* present loan.