Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1918-01-12
L.l|IVSCCIlB
Tor SECURITIES
Direct All New Is
es Into Channels Es-
sential to War
ADOo FORMS SCHEME
nds, Stocks and All Cor
porate Interests Would
Be Affected
WASHINGTON. Jan. y.

|7< The next step in Government con.
to1 h proposed regulation of all prl-
&ta securities.
Legislation Is being drafted by Ad.
Inistration officials and members Of
K ongress authorizing the Treasury to
Icense each security issue, and re.
4nee approval to enterprises regarded
4 ~ not essential to the war. Exercise
u n this function would be assigned to
(; the Federal Reserve Board, or some
1Gency created by 1t. which would pass
IN the priority Of capital needs. '.
As n collateral plan, q Government
: teoFporation to absorb approved stock
" bond issues has been agreed upon
ftentstively.-
A preliminary step being considered
/. ak the White House is issuance OF
proclamation calling on Governors
4 tIegislatures, county. city or other Off.
.ctals to cease making expenditures for
improvements not necessary and to
/, refuse building or other permits, as
far as possible. for construction not
cuntributing to prosecution OF the war.
Secretary McAdoo discussed the
0uestion here with Treasury advisors,
ana definite action Is expected WITHIN
( = week. ,
me result of the undertaking would
b far-reaching. Not only bonds,
stocks and other securities OF corpora
lions would. be affected, but building
y toDerations probably would feel the
frightening of capital. The Govern
ment would have tight grip on the
xxrtth M
< 6icate where capital should be placed
and from which II should be withheld.
TO CURB PRIVATE OUTLAWS
The necessity of Federal regulation
has been emphasized by Secretary Nc
/. Adoo and other officials since the nrst
Liberty Loan, and the Secretary has
Z held that the Government must be pre-
Z nared TO absorb new capital available
/, for Investment during the war. This
i made II essential, he said that unnec'
easary expenditures should be avoided
< n public and private enterprises.
4 Government control OF securities
). should be regulatory and constructive,
: In his opinion.
steps to unity the nations resources
must be taken before the third loan.
officials say. or the Government VIII
find private bonds. stocks ana notes
+4 IN 0OmpetltiOu WIN Noi cSi'S"' ~ N''~
z detriment Of both.
Many corporations have applied to
aacretary McAdoo or the reserve
hanks FOR approval Of contemplated
bond issues. Some represented that
without this they could not ind
h,,vers and that contractors declined
u start work without assurance that
capital would be forthcoming. This Is
4 aaid 70 be a principal contributing
cause of the dullness Of construction
< recently, even with expansions re-
CURED by the war.
W The Reserve Board and Assistant
Y 1ncfetary Lefflngwell. of the Treasury
III kyo analysed applications and founo
Y q majority based on war needs. sPe.
4 Si1c approval has been withheld for
.xrk 81 authority. This would be
ssSfyen by the bill now. under considera
-fion. Securities lacking approval
4 vvouid be barred from interstate sale.
REJECT DISCOUNT PLAN
,ne pian. said to have been aban.
3 Aoned. involved the use of the Reserve
RS@rd'. control Of discount rates In dis
4 srtirnlnatipx In favor Of essential securi-
~. The unfavorable fe lture las that
4 vouId have required the Reserve sys'
tam to deal In long-term securities.
ssotne advisers of Secretary McAdoC
aAvocate a Government corporation. with
: cerhaps $500, 900. 900 capital. with power
kn handle securities recognized by the
4 f3overnment as necessary In the wal
4 emergency. They say this would estab'
+ 1lsh confidence in approved securities
4 ana remove the necessity to absorb any
! Wreat proportion. The plan was sug'
u ~eeted as a means of helping savings
s sTonlxa and similar institutions out OF
!. 6fflculties due to low prices of securi
ifloa The corporation would absort
farn-loan bonds II necessary. eliminat
i; y Srr the special $100,000,000 fund au
y fhorised for that purpose.
.Ek private securities m ,turing this veal
- estimated at $675, 100000. Of which
S9aB .0O0. 900 are of railroads. $215.000
& 6oo of public utilities and s195. 5.00O. .0Ot
& miscellaneous. A large proportion mus
Il ~ met by new securities, special re-
4 1Qnption funds not having been pro
NEEDS OF RAILROADS
Z t*Comprehensive * figures on railroad
1sS6s hive been gathered by Interstat,
3 Hnnsrce Commissioner Daniels from
noFts ordered by Director General Nc
1no. Preliminary study shows rail
.nads contemplated extensive improve
atS this year to care for war traffic
eicularly new terminal facilities
1fx&nse requirements will be under tn,
II no scrutiny and nonessential improve
6nts or extensions will be elir>~7ated.
o1lcials plan to merge railroad fnanc
~ with the general plan If Congress
HnSants to big Government corporation
~ Al $500. 900. 900 appropriation for rail
+ rod extension Is proposed In the rail
~ xo61 bill.
~ .Srhe Reserve Board has paved the wa,
<< ~ curtaslment Of loans to nonessentis
<orprises by asking banks to seal
~ application to ascertain IL II /
rary In view OF war requirements
walton Of credits and material
1oen preached persistently by Sec
~ NcAdoo. Frank A. Vanderlip, di
OF the war-savings campaign. an
leaders.