Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1917-12-07
Over 5 Billion Needed
In Addition to Bonds
And s---McAdoo

| 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 burdens"
or the possibility that interest rates
on future Liberty bond issues might be
l raised. the secretary said:
Rate Increase Unwise
''If a situation should develop where
the government could not sell convert
BILE and partly tax exempt bonds upon
a per cent basis. il would 1 believe,
/ become necessary to ser.Susly consider
/ further revenue legislation. In my
judgment an increase i'm the rate of in
terest of sLch bonds would be extremely
unwise and burtful"
Secretary McAdoo disclosed that he
! intends 10 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.
1T may also become necessary" he
added. Ito concert some constructive
measures through which essential cred
/ its may be provided for those indus tries
and enterprises in the country essential
/ to the efficient and successful conduct
of the war. The subject requires the
best thought and study. II is receiving
the most earnest consideration.
The courage and resources of the ma
ton are so abundant that Americas
success in the war is beyond question
IL they are properly organized and in
diligently used. The economic and
financial condition Of the country was
never so strong, and Americas spirit
vas never more aroused to the impor-
lance and necessity of going forward.
-esolrtely and regardless of sacrifices,
to the accomplishment of the great task
TO which God has called us"
The federal reserve system received
Secretary McAdoos enthusiastic praises
| for it's 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 compa-
( MES.
Intelligent men all over the coun-
/ try he said. ARE beginning to realize
that the financial power Of the United
States should be strengthened 20 the ut
most limit if we are TO meet success
fully the tremendous strain upon our
resources occasioned by our own part
in the war and by the credits which it
is essential that we should extend to
the foreign governments cooperating
with us i'm the war and If we are TO be
equal TO the demands, in large measure,
al least, of world leadership which will
inevitably be thrust upon us as a result
Of this war.
Financial strength can come alone
from a consolidation of the financial
powers of the country under one homo
generous system. 1t cannot be had under
the present ARRANGEMENT, involving as It
does forty-nine separate banking sys-
TENS or banking controls in the United
States In the federal system we have
the one cohesive aud powerful financial
organization in the country. In addt-
ton to the federal system. we have for
ty-eight systems. authorized and ad-
m Mustered under the laws of each OF
the states OF the union. This is Sc
rious element of weakness and will be
proven so when the test of a great re-
sponsibility- and need comes. We must
be prepared for a larger measure of in
ternational demand upon our resources
in the future than ever before in the
past. Self-interest alone should compel
every eligible state bank I'm the country
to take membership IN the federal re-
serve system. but in addition to that,
IN this grave time of national peril. pa
triotism should combine with self-in-
terest TO make them take that course.
1T is my earnest hope that the state
banks of the United States will see this
question i'm it's. proper light. They have
been Joining the federal reserve system
recently i'm greater NUMBER 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
10 suffer serious Disadvantages. espe-
cially i'm time of test and trial IL they
remain outside"
The secretary disclosed that neutral
countries have entered cordially upon
negotiations locking TO stabil.zing 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 governments system OF
forbidding gold exports except under
license By the federas reserve board.
Secretary McAdoo explained. the eX-
portation of gold has not been per-
mitted except in those cases in which
unusual circumstance 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 initiated
a series of negotiations having for pur-
pose the substitution of arrangements
which. while holding the necessity for
large exports of gold. would yet
stabilize the exchanges between the
United States and neutral countries"
Although the nature of these nego-
tiations were rot disclosed. it is under
stood they relate to investments in the
United states by neutral capital and
to restriction of imports from neutrals.
The secretary explained that the
United States now holds more than
one-third of the worlds gold monetary
stock.
Must Sell Farm Loan Bonds
Praising the policies of the farm
loan system. Secretary McAdoo said
some method must be devised for dis
posing of farm loan bonds as soon as
they are issued I'm order to avoid sus-
pending the loaning operations of the
banks He recommended also that
the limit of $4,000 imposed by law up
on loans TO any one individual should
be increased to SIS. 900"
Up to one week ago credits extended
TO allied governments amounted to $50
Ss3, 5000 The latest loans have
been at IA per cent, but Secretary
McAdoo explained that this rate in
turn will be further increased in case
there should be higher rates of inter-
est paid by the United States during
the continuance of the war for thu
moneys that IL may invest in the pur-
chase of foreign obligations"