The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1918-02-14
M'ADOO'S FINANCE
PLAN is SOUND
Rx HOLLAND

| New York, February 13.-(SpeciaL)-oh
I the day announcement was made that
\ the Secretary of the Treasury, Mr. NC
| Adoo, was to ask the banks of the United
| States for cooperation which would pro-
duce in the aggregate before June sS'ooe' :
100000, various bankers Of New York
| city were preparing bids for an issue OF
| so-called New York city revenue bills.
| The amount was, relatively speaking,
not large, only s20,000,000. The bills be-
| come due in May. The eagerness with
| which bankers sought to obtain this IS
sue. the aggregate of the bids amount
| ing to nearly $150,0O0,000, is regarded az
good proof that notwithstanding the stu
| pendous character Of national finance
which must be achieved by June 80
money market conditions are of sucn
character as to Justify conservative and
wise bankers in seeking to invest some
part of their funds in New York city OBJ
legations aggregating $2o0oo,oco
These New York city notes resemble
the exchequer notes with which Great
Britain secures funds in anticipation OF
tax payments. New York city will be in
receipts of many millions of funds
through taxation by May and will be
enabled thereby to take up these temper
airy obligations.
Small, comparatively speaking as this
amount of $20,000,000 is, and secured as 1t
was by ]. P. Morgan & Co, it neverthe-
less illustrtes from one point Of view
the principle upon which Secretary Nc
Adoo based his proposition that the
banks of the United States absorb with
in few months IS, 900, 100000 Of treasury
certificates. For these certificates Will
be available for payment on account OF
the next liberty loan which, according 20
the best opinion in this city, is to aggre-
gate about $1,000 100000 The new financ-
ing which is now beginning and whose
technical features cannot be readily I'M
derstood by the public, but only by bank
ers, will continue until the end of the
fiscal year 1t compels those who are
Undertaking this work to think as the
saying, in seven figures. The aggregate
amount is to be billions instead Of mil
lions We are to raise within few
months more money by several billions
than the aggregate debt of the United
States at the close of the civil war. In
a little over year the government will
have borrowed from the people the sum
of $4,000, 100000.
GREAT COOPERATION
In early September of 1914, we had the
first Illustration of the readiness and ca
pacity of the American banks to cooper
ate upon great scale. They united, in
proportion to their resources, SO that
they were abel to furnish $100,000,000 in
gold within few days. This co-opera-
ton was the first of the many great
achievements in financing since 1914.
1t has been remark commonly made
by some of those who have studied our
financial needs and who have looked
into various propositions which have
been made with intent to reach the best
method of securing the billions which
the government needs, that Secretary
McAdoo must depend, at first at least,
in great measure upon the banks of the
United States for success in floating his
loan. The American banks will serve
as the right hand of the Secretary. They
Will in addition to the work done by
voluntary organizations gradually but
surely pass from their own control into
the hands of the public the third liberty
bonds. 1t is almost uncomfortable that,
within the time fixed by Secretary Nc
Adoo for the floating of the third loan,
presumably to be Sc. 000, 000, 900, this should
be absorbed by the American people as
easily and as speedily as the second lib
erty loan was absorbed. Therefore. the
banks must help.
There is grave doubt about the ability
OF he great industrial corporations to
subscribe to the third loan as heavily as
they did to the second and to the first.
Inere are rumors that some of these
corporations will find it fmpracticable to
make any subscriptions. Their expenses
have increased and their taxes are now
SO enormous as to leave little availble
surplus In some cases. which could be
drawn upon for subscriptions to the
third loan.
Therefore Secretary McAdoo has APP
parently adopted a reasonable and
financially sound expedient of summon
ing into cooperation all of the American
banks, at least all of the national banks.
and as many of the state chartered insti-
buttons as possible so that gradually at
intervals OF two weeks funds may be
secured represented by treasury certiti-
Gates, these certificates in turn being
available for payment on account of the
liberty loan
Ultimately the great bulk OF the third
liberty loan will undoubtedly pass into
the possession of the American people.
fhe situation as it presents itself to Sec
re.ary McAdoo now. has suggested
thought voiced by many of the bankers,
winch is that in order to float success
fully the next loan and the others which
VIII succeed 1t IL the war be continued.
II Is vital that industry of all kinds be
speeded up to the highest productive ca
paclty. For there is to be profitable mar
Ket Tor the production of commodities
OF al kinds, and 1t is through the returns
which the marketing Of these commodi-
ties make possible that funds will be
secured which may be loaned to the gov
eminent.
One item of which Secretary McAdoo
is believed to have taken due heed is the
new wealth which the country has Sc
cured through the crops and meat prod
ucts Of 1917.
The official estimate Of the money
value OF these agricultural products fxes
the amount at approximately so. 00O, OO0,-
600, and this is all new wealth. 1t will
serve greatly 10 aid the government IN
floating the next issue of liberty bonds
and such further issues as in the present
calendar year Secretary McAdoo may
find 1t necessary to offer.