New-York tribune., 1918-06-19
Bankers, Headed by James
N. Wallace, May Form
$10o,000,00 Corporation
Would Buy Public
Service Securit ties
w. P. G. Harding Suggest
ed Appointment of Com
mittee to Formulate Plan

Headed by James n. Wallace, presi-
dent OF the Central-Union Trust Com
pnny, committee Of four prominent
New York bankers has been appointed
at the suggestion Of W. p. &. Harding,
governor of the Federal Reserve
Board and managing director Of the
War Finance Corporation, to investi-
gate the financial needs Of public util-
ity corporations. with the view Of for
lnulating a plan by which needed capi
tai may be supplied. The other mem
bers Of this committee are Charles II,
Sabin, president Of the Guaranty Truet
Company; Thomas w. Lamont, of j. p.
Morgan g. Co., and Frederick w.
Strauss, of J. g. W. Seligman & Co.
The committee has under considera-
tion the organization of S100,000,000
corporation, the function of which
would be to purchase the securities
of public utilities, in turn discounting
its paper with the War Finance Cor
country would be asked to subscribe to
the capital stock of the company in
proportion to their ability to do So,
thus spreading any risk which might
be attached to the operations of the
proposed corporation, while at the
same time insuring the active coopera-
tion of leading financial interests in all
sections toward securing better treat
ment for public service properties
which are struggling with mounting
costs and have been granted no off
setting increase in rates. Such plan
would obviate the necessity Of procur-
n %1 nf
War Finance Corporation Act, rem
edy which bankers believe may other
wise be required.
No Action Taken
A member IF the Wallace committee
stated last night that the plan provid-
ing for the formation OF big corpora
ton with a nationwide participation
seemed to be the most workable one
that had yet been presented. He en-
phasized the point, however, that no
definite decision had been reached as
to whether the necessary steps would
be taken to proceed with the organiza-
tion of the company.
The committee was appointed after
Mr.. Harding's conference with bankers
here last week at the Sub-Treasury.
Opinions expressed by bankers who at
tended this gathering indicated that
solution Of the public utility problem
may be aided by increasing the rates
charged for the services Of the COM
panies. In the particular cases of the
Brooklyn Rapid Transit Company and
the Interborough Rapid Transit Com
pany the suggestion was made that the
Public Service Commission for this
district be urged to allow an increase
in fares from cents to cents. 1t is
believed that a suggestion to this end
made by the War Finance Corporation
might have the desired effect.
So far as the B. R. 4. note situation
is concerned, it was stated that the
plans discussed for big financing cor
poration have no bearing on the July
note maturity. This is problem that
must be dealt with as an isolated case
Bankers made it known yesterday,
however, that they did not favor any
financing arrangement that provided
tor an extension of any part of the
S57,7S5, 900 issue.
War Hurts Utilitiks
Public utility interests have been
urging for some time that in view Of
the heavier cost Of operation resulting
from the war remedial measures should
be taken to Offset higher operating ex-
penses, including materials, labor and
capital. They have referred to recent
utterances of high government officials,
who in this connection have admitted
that the efficient operation of utility
enterprises is a necessary adjunct to
the successful conduct of tha ,rar