Evening star., 1918-07-21
. THE SUNDAY STAR WAsHINGToN D c. JULY II PART
BIZ I. A. 7LEnma.

4
In several sections Of tho country
whore street car fares have beer,
raised to 9 and even cents from,
the familiar five-cent fare manaxers
OF traction companies hays found
that the net results are riot satIs-
factory and they are evidently ready.
to 90 back to the nickel so
It 10 not that the trafic is unwilling
to meet the advance for long hauis.
With. no other means OF transporta-
tion from rssidsnce to business and
vice versa 1t will pay the toll. but
the short hauis. the cream of the
trafic. the profit. will. weather con-
dttions being right. use leg power
and walk back and forth rather than
pay the added cost.
FIVE cents. the handy. nimble
nickel, 10 all right for car fare. but
when the cost exceeds this coin it
knocks a dime to pieces, and on that
to walk and save the dime-a thrift
measure in these days.
Ripening for the Fall.
It certainly looks az If the time were
not far distant when the banks out
side Of the federal reserve system
would be called on to enter the fold.
Paternalism lis the order of the day.
The government is in control of many
great industries; OF the railroads. of
metal production and prices: Is In
authority over food and coal and man
power; has the right to operate tele-
phone and telegraph lines and has a
vehicle at hand for complete unfit
cation Of the financial strength Of the
country.
No one will question the power OF
the administration and its advisers,
II 1t SO elects, to put through a ma
tionaI law forcing all fiscal institu-
tions to Join the federal reserve sys-
TEN.
to the country in time of stress. and
its value as workable strong fiian-
cial system.
Invitation, urgent and pleading,
has been frequently extended to non
member banks to join the system.
Advantages of rediscount and de-
posit OF government funds have been
given to member banks again and
again
1t may be that the financial plan Of
Secretary McAdoo, to place 100000
900 of Treasury certificates among
the banks OF the nation every two
weeks. may eventually be the means
dominant banking system.
These certificates are on the market
for member and non-member banks
alike and. all are expected to par
ticipate in the various issues, So
00o. 100000 in the aggregate. to the
extent Of . per cent of resources each
sale. in order to postpone the fourth
liberty loan until October.
Now q member Of the federal re-
serve system may purchase these GER
tincates and use them as collateral to
secure his own note. Immediately re-
discountable at face value at the
federal reserve bank Of which 1T Is q
member.
1t IL now contended that this same
privilege should be granted to nom
member banks. they giving of their
resources In ratio to assist in the fort
nightly sale Of Treasury certificates.
Their claim seems. to carry GER
tain amount Of Justice and weight
to It. but It 10 impossible. as the re-
discount Is for member banks only.
Some state banks have even gone
30 far al to hold up their subscrip-
tions to certificates.
It 70 this very action that m.y cause
the irst step In . unilcation plan.
The needs Of the government must
be financed. The administration will
NO doubt see to that.
Frequent and urgent requests have
been made on outside banks to come
In and many concessions have been
offered to secure such action.
Gov. McDougal's Views.
Commenting on the matter under
consideration, Gov. McDougal of ths
federal, reserve bank of the seventh
(ChicaGo) District has this to say:
Months ago, in anticipation Of the
governments large -require<nents. all
banks in the country were urged (and
have sincs been continuously uryed)
TO exercise discretion in the extern
sion Of credit, confntng the same SO
far a. possible to uses which were
not Incompatible with the interests of
the government. They were requested
to curtail the extension Of credit for
non-esssntials and to conserve credit
for use Of the government, and for
enterprises which are necessary for
the successful prosecution Of the war.
early in June the Secretary Of the
Treasury gave publicity to the gov
ernment's financial program and prob
able requirements for the ensuing six
months The plan contemplates the
sale Of $75o.0oo,o 900 Treasury certif1-
Gates of Indebtedness every two