New-York tribune., 1918-01-13
Bankers Prepare a.
Plan for Supervising
Issues of Securities
Committee Headed by Thomas w. Lamont Gives Out
Report ON Which Legislation to Effect Priority in
Financing Is Expected To Be Based

Definite announcement from Wash
ington yesterday that the Treasury in
tends to recommend to Congress- legis
lation which will provide for the re-
striction Of new security issues to
those that are essential to the prosccu-
tion of the war met the approval Of !
bankers.
The plan for government regulation
Of the issuance Of corporate, municipal !
and state securities, as outlined in the
Washington dispatches, follows closely
the lines Of report prepared by /
committee of New York bankers last
fall at the request Of the Treasury De-
partment, and probably is based on
that report. Tho suggestion made re-
Gently in The Tribune by Charles II.
Sabin, president Of tho Guaranty Trust I
Company and member Of thA bank
ers' committee, that financial priority
board be appointed to assist the gov
ernmcnt in passing upon new security
issues, it is believed, will be part Of
the legislation which Congress is ex-
pectcd TO approve authorizing the
Treasury Department to license each
individual security issue.
Thomas W. Lamont, of J. p. Morgan
& Co., acted as chairman of the COM
mittee which drew up the report upon
which the government will probably
base it's recommendations to Congress.
In addition to Mr. Sebin, the other
members Of this committee were Allen
B. Forbes, of Harris, Forbes & Co.;
Charles Y. Rich, an executive manager
Of the National City Bank; Mortimer
L. SchiN, Of Kuhn, Loeb e. Co., and
board of directors of the Chase Ma
tonal Bank.
The Lamont committee was appoint
ed by benjamin Strong, governor Of the
Federal Reserve Bank Of New York,
under the authority Of the Liberty
| Loan committee for this district, "to
| investigate the question Of supervision
/ Of capital issues, both public and cor
porate {other than the United States
government securities) throughout the
duration of the war, the question OF
whether such supervision should be
undertaken being deemed important to
the governments plans for the ilnan-
cial and industrial conduct Of the war
This general subject was taken up IN
a recent address Of Secretary OF the
Treasury McAdoo before the American
Bankers Association.
English Financier Consulted
In it's investigations the committee
conferred with Basil p. Blackctt, secre-
tary for long period Of the Britlsh
Capital Issues Committee which had
charge Of the whole problem of do
nestle financing in England, and which
exercised with the cooperation OF the
The committee also conferred with rep
resentatives Of the American Bankers
association and of other bodies i'm
portant in the leading security markets
Of the country. Under the heading
Recommendations the Lamont com
mittec in its report said:
"Wc are clear that prompt steps
should be undertaken to supervise the
issue of public issues which directly
compete with the government. AS to
whether the time has also arrived Tor
active supervision of public utility and
corporate issues there may be some
question. But certainly the situation
should be faced and plans considered
so that the matter may be handled in
r ali intelligent and orderly manner. AS.
, suming, then, that in the near future
, if not imme ediately, some plan must be
devised, we approve y plan FOLLOWING
. the precedent established in England
Of attempting to supervise new tinan
cial issues by means of voluntary CO
operation OF all possible parties III
volved. To attempt to do so by statu
= tory enactment would probably prove
\ unconstitutional. and very likely i
would BE impossible to secure the nee
essary legislation. Accordingly, We
y suggest the appointment by the Sec
G retary of the Treasury Gin England thu
Z appcintive power was the Chancellor o
the Exchequer) of small committee o
priority board, SO called, whose rulings
\ in order to be effective, should b.
final; such board should, as it was il
| England, be authorized to act unit
| fUTther notice as board Of super
vision, with the active sanction an'
support Of the Treasury.
Proposed Organization Plan.
"This board OF supervision (to b.
g composed Of nine members) should, a
>, - to four of the number, be chosen from
- - the Federal Reserve Board, the Inter
state Commerce Commission, the Fed
cral Trade Commission and the Wa
Industries Board; these being the fou
existing bodies whose functions ar
most closely related to the matter un
der discussion. whose cooperation
would be most effective and necessar
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