The Public Debt and Foreign Loans

Report Outline
Reduction of War Debt Since 1919
Future War Debt Retirement

The Second Liberty Loan, issued November 15, 1917, to mature in twenty-five years, has been called by the Secretary of the Treasury for redemption November 15, 1927. All Second Liberties not presented for redemption and remaining outstanding in the hands of the public will cease to bear interest on that date.

The amount of the original Second Liberty bond issue was $3,807,865,000. To date same $1,075,090,000 of the bonds have been redeemed by the Treasury for cash, and $1,975,272,700 have been exchanged by their former holders for other Treasury securities bearing lower rates of interest, leaving approximately $757,500,000 of Second Liberties at present outstanding. Of the debt represented by these bonds, it is anticipated that about ten per cent will be extinguished on November 15, and the remainder refunded into short-term securities bearing lower rates of interest. The principal significance of the Second Liberty operation will be the reduction to be effected in the government's future outlays for interest on the public debt.

Redemption and Refunding of War Loans

The Second Liberty Loan is the second of the great war loans to be refunded during the last five years. The first was the Victory Loan which matured in 1922-23. Victory notes totaling nearly $3,000,000 remain outstanding, but they ceased to bear interest nearly five years ago and are now a part of the non-interest bearing public debt. The next great refunding operation will be carried out in connection with the retirement of the Third Liberty bonds which are payable September 15, 1928.