Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1918-08-05
NEW CAPITAL ISSUES
MUST HAVE APPROVAL
Corporation Which Fails to Obtain
Consent May Go Ahead and
Float Loan.
SMALL FIRMS NOT INVOLVED
Government Will Advance No Money
for Promotion Purposes-Bethlc-
hem Company Will Not Need 500
100000 Allotted to 1t.
Especial to Tho Times-Dispatch,

Especial to Tho Times Dispatch,1
WASHINGTON. August 4.-Complets
mobilization of tho money power of
the country is being undertaken by the
Federal government, and II will soon
be impossible for any corporation.
large or small, to market securities
which have not been approved in
Washington.
4 fnal step in the direction o. the
control of capital by the government.
and its use for essential war pur-
poses. has just been taken IN the rorma-
ton OF Capital Issues Committees in
each of tho Federal reserve districts
to pass upon proposed bond and stock
issues of less than 100000. Already
the government exercises control over
the issues of 100000 or over.
Congress and tho administration have
agreed that tho available supply OF
money in this country should be placed
at the disposal of the government. if
not for direct expenditure by the vari-
Gus war-making departments. certain
~ for tho financing of enterprises
" H'Nh GIG eHSdSeu IN necessary "ir
service. This agreement resulted in
the enactment OF a measure creating
a Capital Issues Committee to sit in
judgment upon new stock or bond
issues, ana the formation OF Il war
Finance Corporation to loan money di-
rect from the Federal Treasury with
which TO meet urgent war needs.
LOCAL COMMITTEES
TO DEAL WITH SMALL CONCERNS
And now the local committees in
the several reserve districts have been
csta blished to deal with the smaller
businesses in the same way that the
capital issues committee deals with
the larger This tightening OF the
grip OF the government upon the ma
Non's money resources is one of the
most interesting developments OF the
great war program, and its effect will
be felt more ard more widely as the
war proceeds. Meantime fresh re
view of the functions OF the various
agencies having to do with this end OF
the general program is made timely
by the fact that many petitioners. such
and the Roads Commission o. Mary
courts, asking for loans or for auth
GRITTY TO float securities.
Four agencies or processes are now
open TO the government and 10 the
essential war industry for the raising
OF money. Briefly. they are:
First. the Federal reserve system,
through which certificates of indebt.
edness and government bonds are sold
to finance strictly government acti-
vities.
Second. the Capital Issues Committee
and its Federal reserve comnieees.
through which private enterpria,s,pcSs
their proposed security issues for ap-
prevail.
Third. the War Finance Corporation
which is authorized to make loans
TO banks and individuals engaged in
war work.
Fourth, taxation by Congress, where
by money is comma ndccred to supple
mcnt that raised from bond sales.
With Liberty bonds and war taxa
ton, the means the government, en-
p!oys 10 raise money for its own use.
the country is fairly familiar. The
sale OF certificates of Indebtedness is
transaction strictly between the
Treasury Department and the banks
Rut the Capital Issues Committee and
the War Finance Corpora ton are in
established for bring
ing private interests into an imnedia,
relationship with the government.
About February 1 the Federal Re
serve Board created committee of
It's own membership to pass upon all
security issues. Appeal to this body
was purely voluntary. and its powers
were restricted TO advice for the guild
ance OF the corporation and the in
weston. This plan OF control remained
in effect until April c. when the bill
creating the present Capital Issues
committee went into effect.
II Is the function of the new com
mittee to pass upon the proposed stock
or bond issues of every corporation In
the sum OF 100000 or more. and to
determine whether or not sucn issues
should he foatcd in order to further
the nations war interests. In most
instances. the committee calls in such
other government bodies as tho War
Industries Board for a report upon the