The Bridgeport evening farmer. [volume] (Bridgeport, Conn.) 1866-1917, 1917-12-05
lively need money.

promising it and shifting the load to
some one else, ''ghe said, that theycitf-
zen really helps in this great ltime.,'
lie added. however, that he did not
mean to discourage legitimate trad
ing in government securities.
| Mr.. McAdoo expressed the hope
that additional funds to be raised dur
ing the balance of the year be by bond
issues rather than by taxation, saving:
1T is my earnest conviction that
the general economy of the country
should be permitted to readjust itself
| to the new revenue laws before. con-
Isideration should be given to the i'm
positionaof additional tax burdens
or the possibility that interest rates
on future Liberty Bond issues might
be raised. the Secretary said:
eff a situation should develop where
1.-THE government could not sell conver-a
|tfble and partly tax exempt bonds up
on 4 per cent basis, It would, I be-
heye, become necessary to seriously
consider further revenue legislation.
In my judgment an increase in the.
| rate of interest OF such bonds would
be extremely unwise and .hurtful."
Secretary McAdoo disclosed that he
intends to RECOMMEND to Congress la.
ter in the session constructive and
regulatory laws to prevent ca pital
from going into public or private en-
terprises unnecessary for the war
ut may also become necessary" he
| added, ito concert some constructive
measures through which essential
credits may be provided for those in
| dustries and enterprises in the country
essential to the efficient and success
tful conduct of the. war. The subject
requires the best thought and study.
1t is receiving the most earnest con-
iisideratfon.s
The courage and resources of the
nation are SO abundant that Americas
success in the war is beyond question
If they are properly organized and in
itelligently used. The economic and
financial condition of the country was
never SO strong and Americas spirit
was never more aroused to the impor-
lance and necessity of going forward,
resolutely and regardless OF sacrifice,
to the accomplishment Of the great
task to which God has called u.s."
The Federal Reserve System receiv-
led Secretary McAdooss enthusiastic
praise for its part in the war finan-
cling program. He pleaded for further
strengthening of the reserve system
by the entrance of state banks and
trust companies. II
Intelligent men all over the coun-
try" he said, "are beginning to realize
that the financial power of the United
States should be strengthened to the
utmost limit if we are to meet sue
cessfully 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 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 a result of this war.
Financial strength can come alone
from a consolidation of the financial
powers of the country under one ho-
mogenous system. It cannot be had
under the present arrangement, invol-
wing as it does 40 separate banking
systems or banking controls in the
United States. In the federal system
we have the one cohesive and pow
erful financial Organization III tine
country. In addition to the federal
system we have IS systems, authorized
and administered under the laws of
each of the states of the union. This
is a serious element of weakness and
will be proven so when the test of a
great responsibility and need comes
We must be prepared, for a larger
measure of international demand up
on our resources in the future than
ever before in the past. Self interest
alone should compel every eligible
Estate bank in the country to take
membership in thes federal reserve
tsystena. 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 in its proper light. They
have been joining the federal reserve
system recently in greater numbers
than ever before, but progress should
i now be even more rapid. The federal
reserve law Is now so liberal to state
banks that they get nothing but ad-
vantages by joining the system, while
they are bound to suffer disadvan-
ttages, especially in time Of test and
trial IL they remain outside"
The secretary disclosed that neu-
trial countries have entered cordial,
upon negotiations looking to stabilize
foreign exchange rates without ship
ping from the United States the gold
(which has been accumulated here in
the last few years. At the time he
tprepaned his report none of the nego
ltiattons had been completed.
Under the governments system of
forbidding gold exports except under
licenses by the Federal Reserve Board,
Secretary McAdoo explained. the ex-
tportation of gold has not been per-
mitted except in those cases in which
unusual circumstances have seemed to
Justify the issue of licenses for its
export. The department has not, how
lever, rested content with a negative
policy of prohibition, but has initial
ed series of negotiations having for
J purpose the substitution Of arrange
ments which, while holding the ne
} cessity for large exports of gold, would
yet stabilize the exchanges between
the United States and neutral coun-
tries"
! Although the nature of these nego-
} tiations were not disclosed, it Is I'M
, derstood 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
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