New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1918-04-04
Obsequiies of
a Rdinbou
4 N IT'S amended form the War Finance
4 Corporation bill has been passed
and sent to the President It will

not be vetoed
Some excellent work was done on
this measure by the House commit
tee, and most Of the provisions which
were there inserted were retained
in the conference bill Two or three
of these went far toward relieving the
measure of its most questionable feat
ures. In the first place, it is fatty pro-
vided that:
"Thc United States shall not be liable
for the payment of any bond or other
obligation, the interest thereon, issued
or incurred by the corporation, nor shall
it incur any liability in respect to any
act or omission of the corporation
This pretty effectively blocks any fut-
ure effort to make the notes or "bonds"
of this corporation legal tender-or the
basis for q legal tender issue of "bond
sccurcd' currency.
Secondly, the measure now puts q
virtual tax of per cent on the advances
made by this corporation. by providing
that all rediscounts at the Federal Re-
serve banks shall be at per cent adj
Nt'IN < WEI tiC DlCNdilllS IdIC IOI IlllC-
ty-day commercial paper. Furthermore,
tho Federal Reserve Board may, at it's
discretion put an interest charge on
amy Federal Reserve notes issued
against rediscounts or purchases of such
paper.
In a word, the Federal Reserve Board
has in its power clearly and fully to
penalize any note issue whatever and
to block an excessive rcdiscountng Of
War Finance securities by the Federal
banks
Although there is no explicit pro-
vision that all such paper discounted by
the Federal banks shall be liquidated in
ninety days, and shall not be open TO
continuous renewal, that is the prefercn-
tiai construction Of the act, and may
so bo regarded by the Federal Reserve
Board.
1t Will be seen. therefore, that the
Federal Reserve Board now has COM
plctc and unQucstionable power to block
all the lnfiationary provisions of the bill
1T has only to stand squarcly against
them. Furthermore, the credit expansion
power Of the War Finance Corporation
Board is reduced from four and a half
to three and a half billions, which is at
least something
We sincerely hope that this measure
Will achieve all the large results OK
pected of it by Mr.. Paul Warburg and
other sponsors Of the bill We were
DIV to
ure, and still regard the whole Finance
Corporation as a needless creation.
winch may prove the entering wedge
Tor vicious attack upon the soundness
OF our financial system. Our views in
this regard have been shared bv the
chet sponsors of the Federal Reserve
banking act and by many other of the
leading tinanciers and economists of the
country.
Aluch now depends upon the member
snip of tho War Finance CORPORATION
Board itself. 1t was freely stated in
Washington that the only reason for this
huge and cumbersome scheme was that
inc Federal Reserve Board does not. as
whole, share the financial views nor
respond promptly to the desires of the
Secretary Of the Treasury and Mr.. John
Shelton Williams.
There is now an admirable opportu-
n!ty for the President to appoint board
OF unqucstionably sound men. who will
by ther spirit and influence, carry ont
the provisions of this act viselv and
conserVatively.
1t would be splendid thing if the
president could see his way clear to
appoint at least one banker or tinancicr
OF high standing and of known under
standing OF financial theory and the
effects of the excessive issue of credit
man, to make the matter specific. such
as, Tor example, Mr.. BENJAMIN Stronc
inc governor of the Federal Reserve
Bank at New York; or Mr.. John Perrin
'he governor of the San Francisco
branch; or Andrew J. Frame, of Wiscon-
SIN; or Congressman L. T. McFaddan
OF pennsylvania, a banker and former
president of the Pennsylvania Bankers
Association
1t would be extremely regrettablc If
inc board we're to be made IN of mon 81
what we may call ''the rainbow tinted
schOol of Mr. Shelton Wi]l;oms