New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-08-29
McAdoo Gives Information
Asked by Critics and
Wins Demands
Flotation Cost Cut
Secretary Says S400,000,0 900
Must Be Raised by Nov. l
to Finance Allies


! lightened regarding details of the
transfer of moneys already authorized
caused their leaders on the Ways and
Means Committee to question Secre-
tary OF the Treasury McAdoo on this
point to-day for more than three hours
behind closed committee room doors.
The leaders emerged smiling and ex-
| pressed satisfaction with the Secre-
| tary's frankness, though still contend
ing that greater assurances OF money
being spent in the United States
! should be required. They indicated,
however, that the bill would be report
ed TO the House without material
change.
Efforts were being made tonight by
some of the committeeman to induce
Democratic Leader Kitchin to call otn-
ers before the committee to testify
regarding the transfer of the moneys.
1t was considered probable, however,
that this would not be done.
Bonds Needed at Once
The Secretary's outstanding state
ment was that it is absolutely neces-
ssry that the $4,000 OOO, 600 worth Of
bonds proposed in the bill to finance
another Allied loan should be voted as
J quickly as possible. Approximately
$500, 900, 900 monthly is needed from
this country 10 carry the Allies cam
paign to July /, 1918, he said, and
while sufficient money is in sight TO
J last until November, after that it will
be necessary to turn TO the proposed
new authorization for funds.
In its questioning of Secretary Nc
Adoo the committee laid stress on three
questions, as follows:
The proposal to give ( per cent in
tercst on tho new bond issue and
make the bonds subject to the in
come supertax.
The question OF how much latitude
Secretary McAdoo should have in de-
terminng the amount of interest on
! certificates of indebtedness.
The proposal OF the bill to allow
ID of l per cent as expenses for
floating the bonds authorized by the
bill.
Despite objections of two or three
Republican members and one Democratic
member of the committee 70 the pro-
posal to allow 4 per cent interest, it
is probable that the committee Will
follow Secretary McAdoo's recommen-
dations in this respect. While several
members declared that such an ar
rangement would make the bonds UNI
popular, McAdoo had his clerks read
prepared tables to show that bonds at
/ per cent, taxable as income as far
as the income supertaX, would be a
good investment, better in most cases
than an investment in non-taxable Ga
per cent bonds.
The suggestion also was made TO
Secretary McAdoo that all income from
bonds to be foated hereafter be made
subject to all parts of the income tax,
but he showed where.it would be neces-
sary TO grant even higher rate CT
interest than 4 per cent to make such
bonds good investment.
Open Rate on Certificates
Fear of the Republican members that
Secretary McAGoo might make unduly
high the amount of interest to be paid
on future issues Of certificates of in
debtedness, all of which are sold to
banks, prompted the suggestion that
the amount of interest TO be paid on
these be specified in the bill
Secretary McAdoo showed, however,
that the condition of the money mar
ket constantly changed and that Ger
titicates of indebtedness to be author
lied are used at any time. Il would
handicap the Treasury Department.
lac
tercst should be specified and the
Treasury Department should attempt
TO sell the certificates at a time when
money was scarce. The certificates Of
indebtedness, Mr.. McAdoo explained.
are temporary revenue raisers and as
such should remain as flexible as
possible as regards interest rates.
The committee intimated that il
would reduce the amount of expenses
allowance contained in the bill. one
httn or ! per cent, to one-tenth of |
per cent. 1t was shown that un Ter the
bills provisions the Treasury Depart
ment could spend as much as $1,000
900 in floating a s3,000,000,00 bond
issue. This expense, tho committee
thought, was high. The one-tenth of
per cent allowance would permit the
spending of $4,000, 900 to float $1,000
100000 loan. 1t also developed to-day
that Secretary McAdoo asked one-ffth
of | per cent for expenses in the bill,
which was enacted into law shortly
after the outbreak of the war; and that
the committee reduced this amount TO
one-tenth Of | per cent.
Fears Free Service To BE Cut
In asking for the allowance of one
fifth Of | per cent Mr.. McAdoo said
that in floating the former loan the
service OF the banks, newspapers and
other marketing agencies were granted
to the government free Of charge, and
that it was possible that such services
might not be rendered gratis in forth
coming loans.
N to-day's session Secretary McAdoo
got as far as the war savings certi-
Gates in his explanation of the bill. He
will resume his explanation before the
committee tomorrow morning. When
he has concluded the committee may
hear a committee Of New York bankers
who desire 10 discuss the terms Of the
forthcoming loan.
Before adjournment tomorrow night
the committee expects to agree on the
bill and have it ready to report 70 the
House by Thursday noon.
. Dl