Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1917-09-10
NEW SCHEME OF FINANCING
RECOMMENDED BY M'ADOO
WAR Savings" Credit One OF Means
to Mobilize Money Resources
OF Country.
OFFERED AS SUBSTITUTE
Inaugurates Plan Whereby Govern
ment May Borrow From american
People Total of So, 1000, 100000 in
Sums as Low as SIS ut Tune.
lSrecial to THE Times.pispatch ]

Especial to The Times Dispatch
WASHINGTON. September 9-Secre-
tary Of the Treasury McAdoo has rec
commended TO Congress. ana the House
has adopted. an entirely new system
OF war financing as one of three means
TO be employed in mobilizins the money
resources OF the country.
This scheme creates "war-savings"
credit. whereby the government may
borrow from the American people a
total OF 5000. 100000 in sums as low
as SIS at a time. 1t is a substitute for
the proposed issue of bonds Of small
denominations. in ono respect. and for
short-tern, Treasury certificates in still
another respect
The whole plan is a novelty. in SO tar
rs American nscal affairs are concern
ed. though II has been employed in
Europe. notably in Great Britain. with
great success IN England il has re
suited in giving millions of people of
small means a chance to help their
government meet the money demands
I o: The war.
( Secretary McAdoc. without notice TO
/ the country. laid his war-savinGs plan
! before the House Committee on Ways
and Means and SO converted that com
mittee 10 the measure that il was in
/ corrorated m the new bond issue au
I ihorization as one Of the three I'M
! rortsnt clements in that measure. In
! fact. II is designed TO raise as great
! = sum as was realized from the p-st
Liberty loan. Acting upon 4 favorable
recommendation from the committee,
the House unanimously passed the saw
ines section.
TO NATURE WITHIN FIVE
YEARS OF DATE OF ISSUE
III brief. The scheme provides:
First-For the Issue OF $4,000 ooe, 900
worth OF war savings certificates.
Second-That they shall mature with
/ III I'VE years from date of issue.
! Third-That these certificates shall
be issued in denominations as low as IS.
! Fourih-1hat they shall bear interest
At The rate of per cent. all Of which
/ shall be paid at maturity.
| Fit:h-That the owner of a certificate
/ may :aS!. II II ~ any time. but will
| only receive per cent. If he gets his
money ahead of maturity
Siyth--lhat the owner of SlG0 worth
OF certificates may convert them into
Z 500 Liberty boud.
Scventh-rhat no investor may o~ H.
at one time. more than $1,000 worth OF
certificates.
CONVINCING STATE::uN1'
MADE TO COMMITTEE
Mr.. McAdoo in championins this new
system of financing has gone into it's
details very clearly and convincinEly.
Tn, b.. fall
for the Ways and Meana Committee
and made public by that body:
rhs plan contcmplates The issue
% d war savings certificate BOOK, each
page OF which will represent IS. ana
iy man who wants to invest-I VIII
use round fsures TO illustrate-s4 ana
have it bear interest. can take 1t
10 mis- post office and buy a 81 stan.p
which will DO put in the book and
Cancelled. and then he would have an
investment with the government which
would accumulate interest at the rat,
OF per cent per annum for FIVE years.
and At the end Of five years he would
cash his certificate in at $5
He can then continue that accu-
mutation until he gets $780, and then
he can convert that. IL he wants to,
q
savings has been tried In Great Brit
ain with great success. They found
that by bringing to the man of the
smallest means the opportunity Of max
ms saving In a simple manner they
could not only add very much to tho
list OF investors. but that they also
have very large resource upon which
they could Graw for the purposes OF
the war. and. in addition to that. they
could encourage thrift and savings TO
a degree not heretofore thought Of.
The plan Is to enable the smallest In
weston here to become interested in
the bonds OF his government Now,
you may ask why we do not issue SIS
certificates and pay interest Or them
every six months. That would moan
mat II we had millions OF investors, as
we probably should have and would
have on this bases. the Treasury would
be required each six months to pay
10 cents In interest on IS bond,
which would manifestly be an 1 posi-
Die thing from an administrative
standpoint
1T is better, therefore, to sell these
certificates with the interest accumu-
lated. so that II accumulates each year,
and is worth IS at the end of fye
years. Provision also ia made in the
bill that none of these certificates shall
be held by any single investor beyond
$1,000 In amount, SO that they NAV
be confined to men of small means.
and 1t also provides that the govern
ment vii! cash IN the certificates ct a
; lower rate Of interest at any time upon
: demand of the holder, 30 that the man
OF small means. who buys a SIS GER
tlhcate and finds himself under such
, pressure that he has to realize on IT,
can always go to the government and
, get his money.
. OPPORTUNITY TO CASH
IN HIS CERTIFICATES
, In that event he would got a small.
g er rate of interest than 4 per con.
6 probably per cent. 1t Is necessar,
TO give the man OF small means th,,
4 opportunity to cash in his certificates
I because otherwise he might hesitate
10 come In. Tho British governmen,
:, ionnd that only one-tentn or per cen,
,, OF the amount OF war savings certin