The Hawaiian gazette., 1918-02-19

be able TO take care of the reqHire-
ments Of this class of borrowers and
be ready TO do Il knowing that tascase
Of need loans Of that character would
be available for rediaeount. y q, !, Z Ss
Tho provision permitting direct loans
by the corporation in exceptional Eases
is intended to provide for those rare
eases where IL may be made to appear
TO the corporation. that q meritorious
borrower II being pnwisoly disqrimi.
mated against by the banks. Jesii
Il Under the terms Of; the bin ~ draft.
ed, the rediscqunt and purchase Of
member hanks, paper secured, by the
notes and obligations OF the pqrpora-
ton would be subject TO the ragu1a.
tions Of the Federal Reserve Board and
the issue Of federal reseFvs notes
against the security Of nambef banks
paper so rediscopnted would be sub.
jeet TO the approval of the Federal
Reserve Board and, 70 its special or
general regulations and al NJ the pro-
visions of law IN respect TO the pur-
chase ,pr discount Of sneh paper and
the use Of such paper as collateral for
the issue OF federal reserve, notes
would extend in 20 Car "A ,Iappli cable,
Including, Of course, the reqniFement
.sf at least forty percent gold reserve
and the requirement. of gold rsdemp-
ton fund.- the minimum amount of
which, is five percent. II must be borne
in mind that the federal reserve banks
can acquire paper secured by those
notes only. when indossed hy member
banks and presented by the latter for
rediseount at such rates as the Federal
Reserve Board may approve.
Preventing Unnecessary Expenditures
the extension of credits the bill pro-
vides for approval by the, corporation,
through a system Of licenses of issues
of securities with a view to prevent,
ing the use of capital In innece ssary
expenditures during the period. -of the
war; This ia of great Importance to
the country in order to conserve the
supply of new capital and make 1t
available for government loans and es-
sential war purposes The, secretary
of the treasury has already asked for
the voluntary submission to the Fed
>eral Reserve Board Of any projected
| capital issue aud has asked the Fed
eral Reserve Board to pass upon such
issues. The Federal Reserve Board Is
already perfortning this patriotic, ser
Vice, and in doing that has secured the
cooperation of prominent bankers act
ing in an advisory capacity, The work
| which the board has taken on this line
should be regarded as preliminary to.
' and laying the basis and furnishing in
no small part the organization for the
work which the corporation win have
I to do. .
Compared To Selective Draft j..
d II is believed that the proposed H.
eepse system is wise and fair. hinee the
voluntary system now set irp motion
will tend to restrict the activities of
those patriotic people who have the
| rnblie interest most at heart and to
discriminate against them in favor Of
those unpatriotic people who ignore the
war necessities by refusing to cooper
ate. The proposed license system is in
line with the act which established the
selective draft in lieu Of voluntary
system of creating an army to win the
war. The sacrifices which must be
made If the war is to be won should
be made by all alike, and not merely
by those whose patriotism impels them
to volunteer and who would have to
carry the entire burden unless the
! Slackers are compelled to do their part.