Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1917-12-06

o1Sll W Tic - 49,
great task to which God has called
u.s.
The Federal Reserve System re-
ceived Secretary McAdoo's enthusiast
tic praise for it's part in the war
financing program. He pleaded Tor
further strengthening of the reserve
system by the entrance of state banks
and trust companies.
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 ex-
tend 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 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
homogeneous system. 1t cannot be had
under the present arrangement, in
volving as it does 40 separate banking
systems or banking controls in the
United States. In the federal system
we have the one cohesive and powerful
financial organization in the country.
In additional to the federal system we
have 48 systems. authorized and adj
miniStered under the laws of each of
the states of the Union. This is seri-
Gus element of weakness and will be
proven SO when the test of great
responsibility and need comes. We
must be prepared, for a larger measure
of international demand upon our re-
sources in the future than ever before
in the past Self interest alone should
compel every eligible state bank in the
country to take membership in the
federal reserve system. But in addi-
ton to that, in this grave time of ma
tional peril, patriotism should combine
with self-interest 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 be-
fore, but progress should now be even
more rapid. The federal reserve law is
now so liberal to state banks that thev
get nothing but advantages by joining
the system. while they are bound to suf-
fer serious disadvantages, especially in
time of test and trial # they remain out
side"
The secretary disclosed that neutral
countries have entered cordially upon ne
EQUATIONS looking to stabilizing foreign
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
or the negotiations had been completed.
Under the governments system Of for
bidding gold exports except under license
by the Federal Reserve Board, Secretary
McAuoo explained, "the expectation of
gold has not been permitted except In
those cases in which unusual circum-
stances have seemed to justify the issue
OF licenses for it's export The denart
ment has not however, rested content
with negative policy of prohibition. hut
has initiated a series of negotiations hav-
ing for purpose the substitution Of ar
rangements which, while holding the nee,
esslty FOR large exports of gold, would vet
stabilize the exchanges between the Unit
ed States and neutral countries"
Although the nature OF these negotta
ions were not disclosed, it is understood
they relate to investments in the United
states by neutral capital and to restric
lions of imports from neutrals Tho COO
rotary explained that the United States
now holds more than one-third Of the
worlds gold monetary stock.
Pralsing the policies of the farm loan
system. Secretary McAdoo said Soma
method must be devised for disposine of
farm loan bonds as soon as thew arc
issued IN order 10 avoid saspandinr the
roaming operations Of the 5trks. Ha rae
commended also that the limit of $40 O0o
imposed by law upon loans to anv one
Individual should be Increased to so5 OOo :"
Up 10 one week ago credits extended to
aimed governments amounted to .3SS3
'o'Vo Inc latest loans have been at Al,
per cent. but Secretary McAdoo ex-
planned that this rate in turn will be
further increased in case there shou,d ba
higher rates Of interest paid bv the
United States during the continuance Of
the war Tor the moneys that it may invest
IN the purchase of foreign obligations.
Both Liberty Loans this year. one az
gregating $4,000, 900, and the other 81
soS'ooooo, have been facilitated, said the
secretary, by issuance Of short time GER
tihcates in advance of the loans. The
bond financing also was aided bv the
designation of 1903 national and 1343 state
banks to receive deposits On account of
their subscriptions without the necessity
OF making applications and being des,g-
mated each time they subscribe to certi-
f1cates and bonds and desire to pay for
them by credit
The humanitarian benefit of the SOL
diers' and sailors insurance system was
praised by the secretary
The Internal Revenue Bureau Mr.. Nc
Adoo said has a stupendous task to col
lect 3'4ooo0,0oo during the current fiscal
year and is accomplishing this largely
with the guidance and counsel OF business
men and lawyer advisors
To render the custom service more eff
clent, 1t was suggested that a complete
revision be made Of customs laws. elimi-
mating certain officials and combining du-
ties.