The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1917-12-18

promising it and shifting the load 10
some one else, - he said, ''that the
citizen really helps in this great time. "
He added, however, that he did not
mean to discourage legitimate trading
in government securities,
Mr.. McAdoo expressed the hope that
additional funds to be raised during
the balance of the year be by borj
issues rather than by taxation, saying,
cit is my earnest conviction that the
general economy of the country should
be permitted to readjust itself to the
new revenue laws before consideration
should be given to the imposition of
additional tax burders.D tf g..
OF the possibility that interest rates
on future Liberty Bond issues might
be raised, the Secretary said: .s
Higher Interest Unwise
elf situation should develop where
the government could not sell cOnverti.
BILE and partly tax exempt bonds upon
four percent basis, it wouH be-
heve, become necessary to seriously
consider further revenue legislation. In
my judgment an increase in the rate
of interest of such bonds would be ex
tremely unwise and hurtfuL'
Secretary McAdoo disclosed that he
intends TO recommend to congress later
in the session constructive and regula-
tory laws to prevent capital from going
into public or private enterprises I'M
necessary for the war. r.. .
1t may also become necessary" he
added, tsto concert some constructive
measures through which essential cred
its may be provided for those indus
tries aud enterprises in the country
essential to the efficient and successful
conduct of the war. The subject re-.
auires the best thought and study II
is receiving the most earnest eonsidera-
tion. ~ ..''" .
Resources Are Abundant
''The courage and resources of the
nation are so abundant that America :
success in the war is beyond question
if they are properly organized and in-
telligently used. The economic and f.
nancial condition of the country was
never so strong and Americas spirit
was never more aroused to the import
ance and necessity of going forward,
resolutely and regardless of sacrifice,
to the accomplishment of the great task
to which God has called us. - e.
The Federal Reserve System received
Secretary McAdoo s enthusiastic praise
for Its part In the war financing pro-
gram. He pleaded for further strength,
ening of the reserve system by the en-
trance of state banks and trust com
panieS.
'Intelligent men all over the coun-
try he said, care beginning to real
ize that the financial power of the
United States should be strengthened
to the utmost limit if we are to meet
successfully the tremendous strain
upon our resources OccasiOned by our
own part in the war and by the cred
its which'it is essential that we should
extend to the foreign governments co.
operating with us in the war and if we
are to be equal to the demands, in
large measure, at least, of world lead
ership which will inevitably be thrust
upon us as result of this war.
Must Consolidate Powers
Financial strength can come alone
from a consolidation of the financial
powers of the country under one no.
mOgenous system. 1t cannot be had
under the present arrangement, inyolv-
ing as it does forty nine separate bank
ing systems or banking controls in the
United States. In the federal system
we have the one cohesive Hand power
full financial organization in the coun.
try, in addition to the federal sys.
tenn we have forty.eight systems, au-
thOriZed and administered under the
laws of each of the states of the union.
This is a serious element of weak
nj KaFin hn H. 4.
test OF great responsibility and need
comes. We must be prepared, for a
larger measure of international de.
ulhr,' mon our resources in the future
than ever before in the past. Self.
interest alone should compel every elig
ible state bauk in the country to take
membership in the federal reserve sys-
TEN. But in addition to that in this
grave time of national peril, patriotism
should combine with self-interest to
make them take that course. 80
at is my earnest hope that the
state banks of the United States will
see this question in its proper light
They have been joining the federal re.
serve system recently in greater mum.
bers than ever before, but progress
should now be even more rapid The
federal reserve law is now so liberal
to state banks that they get nothing
but advantages by joining the system,
while they are bound TO suffer serious
disadvantages, specially in time of test
and trial if they remain outside"
stabilizing Foreign Exchange ~
The secretary disclosed that neutral
countries have entered cordially upon
negotiations looking to stabilizing for
eign exchange rates without shipping
from the United States the gold which
has been accumulated here in the last
few years. At the time he prepared
his report, none of the negotiations
had been completed.
Under the government 5 system Of
fOrbidding gold exports except under
license by the federal reserve board,
Secretary McAdOO explained, "the ex.
portatiou of gold has not been permit
ted except In those eases in which un-
usual circumstances have seemed to
Justify the issue of licenses for its ex-
port. The department has not, how.
ever, rested content with negative
policy of prohibition, but has initial,
cd u series Of negotiations having for
purpose the substitution Of arrange,
ments which, while holding the neces-.
slty for large exports of gold would
vet stabilize the, axrhanpes hetweeu