New-York tribune., 1918-06-13
Bankers Suggest
6 Cents Fare on
Subway and BRIT.
War Finance Directors Are
Told Change in Law :,
Is Necessary

Leading New York bankers and bond
men, who conferred yesterday morning
with directors of the War Finance Cor
poration In the Offices of the Sub-Treas-
ury on the problem of financing the re-
quirements of public utility companies,
took the stand that they could not make
loans as specified in Section 7 Of the
war corporation act unless 1t were
amended or changed to conform with
their views.
In view of the proximity Of the
Brooklyn Rapid Transit $57.00o,oOO
maturity on July 1, it was strongly in
timated by the bankers, however, that
they would join in any plan for financ-
ing this obligation in the event that an
increase in the present scent fare to
cents were allowed. This action was
seen as a probability, as there is not
sufficient time to amend the war finance
corporation act to meet the objections
of the bankers.
Suggest Subway Fare Rise
1t was also made clear that the ap-
plication of the Interborough RAPID
Transit Company for a loan of $37, ,IO0,-
600 with the governments new credit
instrumentality should he classed with
the Brooklyn Rapid Transit's case. The
need of higher rates was emphasized
to place the company in position
where the banks would be willing to
underwrite an offering of its securities.
w. P. G.. Harding, governor OF the
Nd I'D Yo1O n a CrI r q
director of the War Finance Corpora
ton, at the conclusion of yesterdays
conference issued the following state
ment:
"a meeting of the board of directors
of the War Finance Corporation was
held at the Sub-Treasury this morning.
number of prominent bankers were
present for the purpose of discussing
the operations of the corporation in
connection with the financial institu-
tions Of the country. The discussion
of any specific case was merely Incl
dental to the discussion Of the general
principles involved. No definite con-
clusions we're reached, and the board Of
nouncement to make at this time'
Besides Mr.. Harding, Eugene Meyer,
ir:, Clifford M. Leonard and Angus
w. Mclean, other directors of the
corporation, attended the meeting.
The bankers present included james N.
Wallace, president of the Central Trust
Company; j. P. Morgan and Thomas
w. Lamont, of ]. P. Morgan & Co.;
Francis l.. Hine, president of the First
National Bank; James S. Alexander,
president of the National Bank of Com
merce; Jerome ]. Hanauer, Of Kuhn,
Loeb & Co.; Walter E. Frew, president
~ ho NY
McGarrah, president of the Mechanics
and Metals National Bank; C. E. Mitch
ell, president of the National City Com
pany; Charles H. Sabin, president of
the Guaranty Trust Company; A. H.
Wiggin, chairman of the Chase Ma
tional Bank; Frederick w. Strauss. of
J. and w. Seligman G. Co., and Seward
Prosser, president of the Bankers
Trust Company.
In explaining the position of the
bankers one of them said that if any
bank or trust company stood between
the War Finance Corporation and a
PUBLIC utility enterprise by guarantee
ing the latter's obligation it not only
would be acting against the interests
of the depositors, bit at the same time
it would not be carrying out the wish
of the government that it keen its re-
sources liquid.
Resources Must Be Liquid
"The government wants US to keep
our funds ready at all times for in
vestment in Liberty bonds or Treasury
certificates of Indebtedness" said this
banker. "If we go ahead and finance
the needs of number of public utility
corporations it would not be long be-
fore we would be unable, perhaps, to
subscribe to Government loans to the
extent desired" IN;
Public utlnty men expressed disap-
pointment over the fact that they were
not asked to present their side of the
case. Many of them confidently ex-
pected chance to talk, but directors
of the War Finance Corporation, IN ex-
planning why the public utility men
were not permitted to participate in
the discussion, said that no formal
hearing had been intended.
Mr.. Harding was asked after ycster-
days meeting why it was that loan
Of $3,235,000 was made recently by the
War Finance Corporation direct to the
United Railways Of St. Louis, when
this was not the general policy OF the
corporation. He replied that the St.
Louis concern was made an exceptional
case because it was able to offer as
part of the security $1,000,00O Of 3 u