NOTE. To ascertain the correct amount to adjust interest upon any given date, run down the date column until the date is reached upon which the bonds or interim certificates to be converted will be actually surrendered at the place of conversion, then run across the page to the right until the figure under the denomination column of the particular denomination of bonds or interim certificates to be converted is reached, and then multiply that figure by the number of bonds or interim certificates of that denomination to be converted. For example, to convert on January 9, 1918, $10,000, face amount, of bonds or interim certificates, of the denomination of $1,000 each, the amount required as shown by the foregoing interest table to adjust interest upon a $1,000 bond being $0.34, that amount must be multiplied by 10, and the result shows that a payment of $3.40 must be made to the United States to adjust interest upon conversion of such bonds upon that date. EXHIBIT G. LIBERTY LOAN-DEPOSITS OF GOVERNMENT FUNDS IN CONNECTION WITH THE LIBERTY LOAN. 1917. Department Circular No. 81. (Liberty Loan Circular No. 3.)1 Division of Public Moneys. TREASURY DEPARTMENT, OFFICE OF THE SECRETARY, To Federal reserve banks and other banks and trust companies incorporated under the laws of the United States or of any State: In pursuance of Department Circular No. 79, dated May 16, 1917, hereto attached, any bank or trust company desiring to qualify as a depositary for the purpose of making payments by credit, or of receiving deposits of funds, in connection with the Liberty loan, under authority of the act approved April 24, 1917, should promptly file an application through the Federal reserve bank of its district (on Form A, Liberty loan, hereto attached). As stated in said circular No. 79, because of the great amount of work involved in passing upon the qualifications and securities of the banks and trust companies which will have payments to make, it is deemed necessary, until after July 1, to limit to those banks and trust companies having payments to make on subscriptions for $100,000 or more bonds the provision for making payment by credit-the object in providing for payment by credit being to avoid any disturbance of the money position which might result from large payments being made between June 28 and Monday, July 2, a period when there is customarily a heavy movement of funds due to corporate interest and other payments. It is, however, entirely admissible for banks and trust companies in any region or regions, by voluntary association among themselves, to pool their subscriptions and payments and to designate one of their number through which subscriptions and payments upon subscriptions shall be made, and which shall be, as between itself and the United States, regarded as the responsible subscriber and depositary. In any such case the banks and trust companies so associating themselves would no doubt arrange with the central bank or trust company so designated to represent them to redeposit the moneys credited and deposited with such central bank or trust company among the associated banks and trust companies in proportion to their respective payments in cash and certificates upon subscriptions to the loan. If banks and trust companies will thus voluntarily associate themselves together they will relieve the Federal reserve banks of the several districts of the burden of the work, and, by arrangement among themselves, obtain participation in the deposits from the beginning, whether or not their individual subscriptions 1 Supplementing Department Circular No. 79, dated May 16, 1917. amount to $100,000 or more bonds. The banks and trust companies so associating themselves will deal only with the central bank or trust company, and the latter will deal with the Federal reserve bank and make the application and deposit the securities as hereinafter provided. As stated in Department circular No. 79, dated May 16, 1917, the answer to the question, how long the amounts paid by credit may be permitted to remain with designated depositaries, will depend in large measure on the extent to which the privilege of payment in full for the bonds of the Liberty loan on or before June 28 is availed of. As soon after July 2 as practicable the qualifications and securities of all banks and trust companies making application to become depositaries will be passed upon, whether or not their subscriptions be for less than $100,000 of bonds of the Liberty loan, so that any incorporated bank or trust company in the United States, however small the amount of its subscriptions and though it should not choose or find opportunity, by association with others, to participate in the original privilege of payment by credit, will have an opportunity to qualify and, when designated as depositary, to participate in deposits, and the cash proceeds of the Liberty loan from time to time remaining unexpended will be deposited among the subscribing banks and trust companies designated as depositaries as nearly as may be in proportion to the payments of each in cash and certificates of indebtedness upon subscriptions to the Liberty loan. The Secretary of the Treasury requested, in Department circular No. 79, dated May 16, 1917, that at least 50 per cent of the payments to be made by the several banks and trust companies be made in Treasury certificates of indebtedness issued under the act approved April 24, 1917. To the extent, therefore, that any bank or trust company makes more or less than 50 per cent of its payments in certificates of indebtedness, the deposits to remain with it out of the unexpended proceeds of the loan will, as nearly as may be, be proportionately increased or reduced; and accordingly transfers will be made from banks and trust companies whose payments in certificates have fallen below 50 per cent to those whose payments in certificates have exceeded 50 per cent, provided that the amount deposited with any one bank or trust company will not exceed the amount paid by and through it in cash and certificates. It will be understood that the foregoing outlines only the general principle governing the deposits, withdrawals, and redeposits to be made from time to time. On account of the great number of banks and trust companies which will doubtless participate in the deposits and the difficulty of compiling returns and of making transfers, it may not be possible to adhere to it precisely nor immediately. The Secretary will be governed by this general principle as nearly as practicable, but the announcement of the principle must not be permitted to qualify the absolute right to call for and to receive payment of any or all deposits at any time and from time to time. Needless to say, it will be his pleasure and his duty to exercise this power, which he must reserve, in such a way as in his judgment will be most likely to avoid any financial disturbance, and with due regard for the patriotic assistance rendered by the banks and trust companies in connection with the Liberty loan. Collateral security accepted.-Pursuant to the provisions of section 5153, Revised Statutes, as amended, approved securities of the following classes will be accepted as collateral security for Government deposits made under authority of the act approved April 24, 1917: (a) Bonds and certificates of indebtedness of the United States Government of any issue, including bonds of the Liberty loan and interim certificates for payments therefor, all at par. (b) Bonds issued under the United States farm-loan act and bonds of the Philippine Islands, Porto Rico, and the District of Columbia, all at par. (c) Bonds of any State of the United States at market value, not exceeding par. (d) The 3 per cent bonds of the Territory of Hawaii at 90 per cent of par, and other bonds of said Territory at market value, not exceeding par, and bonds of the Manila Railroad Co. at 90 per cent of market value, not exceeding 90 per cent of par. (e) Dollar bonds and obligations of foreign Governments (and of the dependencies thereof) engaged in war against Germany and issued since July 30, 1914, at 90 per cent of the market value thereof in the United States, not exceeding 90 per cent of par. (f) Bonds of any county or city in the United States which are direct obligations of the county or city as a whole at 75 per cent of the market value thereof, not exceeding 75 per cent of par. (g) Railroad mortgage bonds secured by direct mortgage upon lines of railroad within the United States at 75 per cent of the market value thereof, not exceeding par, but not including any such bonds which at date of this circular are at a market price to yield more than 5 per cent per annum, if held to maturity, according to standard tables of bond values. (h) Commercial paper which is eligible for rediscount or purchase by Federal reserve banks and which has been approved by the Federal reserve bank of the district in which the depositary bank is located, at 75 per cent of par. All such paper must bear the indorsement of the depositary bank. At least 25 per cent in value, as above determined, of the securities. deposited by any bank or trust company to secure deposits must consist of those mentioned in paragraph (a). No State, county, or city bond will be accepted if default has been made in payment of principal or interest during the past 10 years. The Secretary of the Treasury reserves the right to call for additional collateral security at any time. How deposits are to be applied for.-Any bank or trust company desiring to qualify as a depositary should at the earliest possible date file an application (Form A, Liberty loan, hereto attached) with the Federal reserve bank of its district, or where the applying bank or trust company is located in or nearer to a city where a securities committee has been appointed, as hereinafter provided, with such securities committee. Such application must state (a) the amount of bonds of the Liberty loan subscribed for by or through such bank or trust company; (b) the amount of payments to be made by such bank or trust company on such subscriptions on or before June 28; (c) the amount of such payments to be made in cash and the proportion of such payments to be made in Treasury certificates of indebtedness; (d) the security offered by such bank or trust company for deposits. Each such application must be made in quadruplicate. The Federal reserve bank of each district will report to the Secretary of the Treasury as to all applications filed with it, directly or through securities committees, and will transmit one quadruplicate original of each application to the Secretary of the Treasury with the recommendation of the Federal reserve bank. Formal designation of banks or trust, companies which shall file the applications above required on Form A, Liberty loan, will be made as promptly as possible, under the direction of the Secretary of the Treasury, through the Federal reserve bank of the district. Any bank or trust company which in its application on Form A shall have underestimated or overestimated the cash payments which it will have to make may file a supplemental application and tender additional security, or ask for the withdrawal of security, as the case may be. The security tendered in the first instance must be sufficient to cover at least the amount payable otherwise than in certificates of indebtedness on or before June 28, and which the bank or trust company expects to pay by credit. Banks and trust companies may, however, tender securities to cover also the payments which they are to make in certificates of indebtedness, and on the basis of which, as above indicated, they may participate in deposits as transfers and redeposits are made from time to time. Amounts withdrawn by depositors of the applying bank or trust company to pay for Liberty loan bonds must not be included in its application unless such depositors have arranged to make application and payment through such bank or trust company. How deposits are to be made.-If the securities offered are approved the depositary bank or trust company will receive written notice from the Federal reserve bank of its district that it is authorized to receive for the account of the Treasurer of the United States a sum stated upon the deposit by it of the securities approved by the Federal reserve bank with the designated custodian. Each bank and trust company designated will be required to open and maintain for the account of the Treasurer of the United States a separate account to be known as the "Liberty loan deposit account." The depositary bank or trust company shall transfer to the Liberty loan deposit account on or before June 28, 1917, the amount then payable by it otherwise than in certificates of indebtedness on its own subscription and on the subscriptions of others made through it to Liberty bonds. Such bank or trust company must then notify the Treasurer of the United States and the Federal reserve bank of the district by letter or telegram to reach them on or before June 28 (on Form B, Liberty loan), and must issue (on Form C, Liberty loan) certificates of advice in duplicate, stating the amount standing to the credit of the Treasurer on its books in the Liberty loan deposit account. Said forms will be furnished through the Federal reserve banks. Such certificates of advice shall be forwarded as follows: The original to the Treasurer of the United States in Washington and the duplicate to the Federal reserve bank of the district. The Federal reserve bank, acting as fiscal agent of the United States, will thereupon credit the subscriber with the amount as a payment or part |