New-York tribune., 1918-12-24
British Trade
Committee Urges
Credit Dehation
Recommends Restoration of
Effective Gold Standard
and State Aid for Industry
i'm Reconstruction Period

LONDON, Dec. 23.-There will be ar
increased demand for credit facilities
during the reconstruction period. anc
the ability Of trade and industry gen
orally to provide for it's financial needs
will depend largely on the amount OF
reserves it has been possible to accu-
mulate, says the report Of the commit
tee on the provision of financial facili-
ties for trade after the war issued to-
day by the ministry of reconstruction
The committee is under the chairman
ship Of Sir r. V. VassarSmth, chair
man Of Lloyds Bank.
There are three main divisions under
this head, the report says. They are
firms engaged upon war work from 8
date soon after the beginning of the
war, firms who became engaged on wal
work at later period, and new firms
created as result of the enormously
increased demand for war material
Want Government Expression
The chief financial difficulty, accord
ing to the report, will be in connection
with the third group. Uncertainty is
the greatest deterrent to industry and
finance alike, and the belief is ex-
pressed that the government should an
nounce it's future fiscal policy and also
make known its stand concerning the
rationing of raw materials and the
priority Of essential industries. There
are also the questions of the determi-
nation of contracts for munitions and
the disposal of state-owned factories
and surplus stores.
To achieve the reconstruction OF
trade and industry on sound financial
and economic lines, the report contin-
ues, it will be necessary to reestablish
a sound financial basis by means of an
effective gold standard, to check any
undue expansion of credit and to take
steps to reduce the imitation of credit
to more normal proportions The
banks will be in position to meet de-
mands for ordinary banking facilities
In order that enterprises of national
importance may have the first call upon
the available supply of capital, it is
desirable to maintain for a period after
the war supervision over new issues
and over the export of capital.
On the question of state aid to in
dustry the committee recommends the
formation of committee toedeal with
cases of hardship arising out of con-
tracts for munitions. One of the larg-
ance will be the necessity for the re-
quirements of factories, alteration of
machinery and shortage in materials
which will have to be met by increased
financial facilities.
Reserves Sufficient
The committee thinks that fears as
to the ability of trade and industry
to meet the financial needs during the
reconstruction period have been exag-
gerated In spite of the increased taxa
ton very large number Of establishe
trades nave been able to accumulate
sufficient reserves for the needs of re-
construction.
Commenting on the expansion OF
credit and paper currency the commit
tee says that whereas the total deposits
at the banks of the United Kingdom
exclusive of the Bank of England, at
the end of 1913 amounted to 91,0T0,-
000,0 900; the amount of deposits now is
nearly 92,00O,00O,000
The committee says it is essential
for the reconstruction Of industry and
commerce to impose restrictions as
soon as possible upon the creation of
additional credit by the restoration of
an effective gold standard
The policy of trade organization now
in evidence is welcomed by the COM
mttee as furnishing sound basis for
granting credit facilities to industry
the committee also believes that if a
portion Of the new issues of stocks
which will be necessary for many
manufacturing establishments, were in
the form of preferred stocks giving a
good return in dividends and were re-
served for the workmen, it would assist
materially both financially and in other
equally important directions
State Aid Recommended
Regarding state aid, while the COM
mittee does not recommend the guar
anteeing of banks by the government
or the investment of public money in
loans to persons who have been un-
able to obtain them from other quar-
ters, it is considered that cases of
hardship may arise. and to meet them
the committee suggests the establish
ment of a small committee of govern
ment officials and business men to con-
slider The claims and act as a tribunal
The committee is also of the oninion
that 1t would be of great assistance to
manufacturers if a proportion of the
excess profits tax should be retained
lor a period as loan upon terms
likely to secure early repayment.