New-York tribune., 1918-09-14
House Balks
WarBondRaiid
By Profiteers
President Given Power to
Prohibit Sales After
Kitchin Exposes Plot
Especial Dispatch to The Tribune)

Especial Dispatch to The Tribune)
! WASHINGTON, Sept. 13.-Forced to
accept an amendment in committee of
the hole, by vote of 81 to 81, deny
ing the President the right to pro-
hlbit dealing in Liberty bonds, Chair
man Kitchin rallied his supporters in
the House this afternoon and won back
the lost ground by 116 to 81. After
this amendment was finally beaten the
House passed the bill for the relief of
Liberty loan bonds from certain de-
gree of taxation, substantially as it
was introduced by the committee, and
on reconsideration adopted it unani-
mously
But to win after losing the chair
man had to divulge information that he
mad not intended to publish Members
or both sides of the House were puz-
zIed to know why the Treasury Depart
mcnt wished to have the power given
70 the President to prohibit transac
tIons in Liberty bonds. 1t seemed to
be a grant OF power far beyond the re
qulrements of the problems Of stabiliz-
ing the bonds.
Plot to Corner Bonds
-, III mad come to the know ledge Of the
treasury Department, Mr.. Kitchin said,
IN an lmpassloned speech as he took
,he moor to reverse the parliamentary
cattle' that syndlcatcs were being
formed to operate all over the country
and buy up small holdings of Liberty
bonds with view of dumping them on
lhe inarhet, even at loss. thus de-
preclatlng the price and preparing the
way for future advance of Liberty
loan interest rates to and even per
cent: 1T was to defeat this unpatriotic
manipulation that the Secretary of the
reaSury mad asked Congress to give
( the President so great a power as to
forbid a citizen to sell his bonds
After this eleventh hour explanation
Mr.. kltchin gave the party discipline
signal by denouncing the propounder
OF the amendment, Representative
Hayes, of California, ranking Republi-
can member of the Committee on Fl
/ nance and Banking, for dragging parti-
( sanship into the consideration of the
bill. Then he concluded with stirring
appeal to the House that had given the
President absolute control of the lives
, OF 23,OUO,00O men and that had given
| HIM authority to forbid exports and to
do a great many things that would
, have dire results if the authority were
abused, to give the President also the
authority to say what citizens should
Hayes Denies Politics
Representative Hayes replied by de
nying that there was any partisan
motive in the making of his motion
! and rcbuked Mr. kitchn for not
smoothing the road Tor the bill by
telling at the outset what had hap
pened to make necessary such danger
Gus delegation of power After this
substantial admission that if Mr.
! kitchin had earlier taken the House
into his confidence the fight might
have been avoided, MIR Hayes pleaded
with Mr.. kitchin to let the bill go over
/ thought satisfactory compromise
could be arranged. But MIR. Kitchin
insisted on vote. When it was taken
many Republicans who had supported
Mr.. Hayes in the committee of the
whole deserted him, and all the Demo
Gratis, with the exception of two, lined
up with Mr.. kitchn for the bill una
mended in this respect. Throughout
the fight the Republican members of
the Ways and Means Committee, with
the exception of Sloan of Nebraska,
stood with Mr.. Ktchin.
The House took up the bond relief
bill, proposed by Secretary McAdoo,
upon convening, and the fight against
the bond restriction provision began
! almost Immediately.
Mr.. Hayes, supported b. other mem
bers, argued that to give the President
power to prohibit the sale of bonds
would be to weaken rather than to
strengthen the bonds, since the knowl-
edge that the President had such a
/ power would impair confidence in the
value of the bonds. Mr.. Hayes stoutly
maintained that it was not for lack
OF confidence in the President that he
proposed his amendment to strike out
the word "prohibit" but SIMPLY because
be detrimental to the purpose in view.
AS business man he said that he
would hesitate to put reserve funds
into Liberty bonds if he knew that
their sale might be forbidden. In the
first instance, he said, Liberty bonds
were largely subscribed for by the
banks, which afterward passed them
on to their customers, but with the
knowledge that their value might be
impaired at any moment they would
hesitate to do so in the future. Mem
bers of both sides of the House sup
ported him in his position.
Responsibility on McAdoo
In the beginning of the debate both
Mr.. Kitchn and Mr.. Fordney, ranking
Republican member of the Ways and
Means Committee, advocated the bill
as introduced. At this stage Mr.
Kitchin did not seem especially CON
cerned about the opposition to the use
of the word "prohibit." He was even
inclined to admit that it was possibly
an unnecessary delegation of power
but took the position that the Presi-
dent could be relied upon not to abuse
it. Moreover, he said that as the re-
sponsibility for stabilizing the price
Of Liberty bonds and successfully
floating the next issue was with the
Treasury Department, it was the duty
of the House to leave the responsible
ity undivided by giving the Treasury
what it asked for. 1t was not until
the vote in the committee Of the whole
went against him that he brought UP
the reserve artillery of the contiden-
tial information of the raid that was
being organized against the market
prices of Liberty bonds in order to
force higher rate of interest
There was some disposition to at
tribute Mr. Hayes's opposition to the
bill as introduced to the fact that Sec
tion had not been referred to the
Committee on Banking and Finance.
Think They Were "Slighted''
Early in the debate Chairman Carter
Glass. OF that committee, expressed
his displeasure that matter plain
Iy within the Jurisdiction of his
committee had not been referred TO il.