South Bend news-times. (South Bend, Ind.) 1913-1938, 1918-02-09
URGES WAR MONEY
MEASURE HURRIED
MCAdoo Fears Possible ISSu.
anCe of Money Without
Gold to Back 1t.
international News Service


WASHINGTON. Feb. S-The
United States may have 70 come to
the practice Of issuing form of
money, back OF which there is no
gold reserve. If the war continues
long enough. Sec'y Of the Treas
NcAdOO made this statement today
10 the senate finance committee. He
argued that the immediate passage
OF the $500. 100000 war finance cor
pOration LilI would forstall this AMI
make the issuance Of uncovered pa
per a last resource. when the A.
nances OF the nation are drained.
Urging prompt passage Of the bill
Mr.. McAdCO read a prepared state
ment explaining in detail the pur-
poses of the bill. lie declared that
the throwing of Liberty bonds and
other government loans upon the
money market had tended to pre-
empt capital so that business, in
Guiding many enterprises essential
to the conduct of the war were find
ing il well-nigh impossible TO sell
their securities
Would End Practice.
He said that the bill would do
away with the present practice #
the war department and shipping
board in advancing 20 percent Of
contracts 10 enable contractors TO
speed up war work. He called this
"a bad practice
The bill would place the problem
of financing new war enterprises in
the hands of the treasury depart
ment where il would be handled
more scientifically, he pointed out.
Mr.. McAdoo declared that another
effect Of the measure would be TO
allay apprehension among the saw
ings banks and throw off the danger
Of the withdrawal Of deposits
Sen. Smoot asked if the war IL
nance corporation wouldn't issue un-
covered paper.
In no sense does this bill provide
for an issue Of uncovered paper
answered Sec'y McAdoo. I'VE may
have to come 10 that, but for the
present it can be most easily avoid
ed by the passing of this war IL
nance corporation bill, which will
utilize the entire credit of the coun-
try in war making"
To Prevent Expansion.
Sec'y NcAdoo declared that the
bill would be a measure TO prevent
unsafe expansion. He declared that
the provisions for licensing seCuri-
ties would control the banks in their
loans and prevent the issuance If
securities except upon a sound
basis. He declared that similar
schemes are now in operation n
England. France and Germany.
THE bank Of England is prac-
tically a war finance corporation,
Sec'y McAdoo said.
This bill will utilize for war pu--
poses the revolving credit of the en-
tire industries Of the United States, q"
Secy McAdOo said.
Sen. Penrose criticised the bill
because it placed the power OF APP
pointment Of members Of the cor
poration IL the hands OF the secre-
tary Of the treasury.
Mr.. McAdoo said he didn't con-
slider the provision material and
that congress could eliminate it if it
wished
The secretary said he considered
il a rather severe restriction to pre-
vent the directors of the war finance
corporation from occupying any
other relation with banking institu-
TORS. He said it would limit the fled
Of selection but expressed the opin-
ion that il would be possible to get
some good men TO make the neces-
sary sacrifice.
Would Protect Banks.
Some of the republican senators
showed much concern over the con-
dition of the savings banks and
urged that every protection be eN-
tended to them. Mr.. McAdoo de-
Clared il would.
The secretary stated also that one
Of the purposes of the bill was to
aid the farmers.
Secy McAdoo stated that the war
finance corporation would stabilize
the price Of Liberty bonds
This afternoon Gov Harding II
the federal reserve board and Paul
NJ. Warburg appeared before the
committee Sec'y McAdoo will re-
sumo his testimony on Monday