Evening star., 1918-02-08
EXPLAINS OBJECTS
Of FINANCE BILL
Secretary McAdoo Tells Sen
ate Committee How Loans
Would Be Made.
ALL BANKS TO Benefit

Secretary McAdoo, before the Senate
| finance committee, explaining the wal
finance corporation bill, said it was
purely war measure contemplating
| the lending of money through banks foI
operation of enterprises necessary to
the successful prosecution of the war
Under the bills provisions. he ex-
planned. should a bank lend money to a
| munitions factory, the bank could OBJ
tain through the war finance corpora
tion loan amounting to IS per cent
of the sum advanced.
These loans could be made to any
bank, whether a member of the federal
reserve system or not.
Direct loans to concerns engaged in
war activities could be made under
specified restrictions if it were shown
that banks were discriminating against
them.
Would Check Uncovered Paper"
Similar legislation now in force in
England and France has been success
full, Secretary McAdoo said. Senator
Penrose observed that in England
there had not been any issues of "un-
covered paper
AT least the covering is SO thin you
can't see it," remarked Senator Smoot
''and that is exactly what We are COM
ing to in this country"
Mr. McAdoo said the bill sought to
prevent that condition.
Seeks Broader Power.
Explaining the section authorizing
him to appoint the members of the
board of directors of the corporation.
Mr.. McAdoo said the operations of the
corporation were so closely allied with
the Treasury Department that it was
almost a branch of the department.
Because of that condition the policies
of this corporation must be articu-
lated through the Treasury" he said.
The powers proposed to be conferred
on the corporation could be carried on
new by the Treasury except with GER
tain exceptions, he said. but the gov
ernment would not obtain the same re-
suits. as it would not have the f1exi-
bility to do things that could be con-
ferred on a corporation Of this charac-
ter.
Some of the committeeman showed a
marked Discrimination to have the di-
rectors of the war finance corporation
appointed by Secretary McAdoo. as the
bill proposes, and insisted they should
be appointed by the President Mr. Nc
Adoo said he did not object to amend
ing the bill to meet that objection.
Protection to Savings Banks.
Assurance that savings banks will
be given ample protection under the
proposed act was given the committee
by Secretary McAdoo. His attention
was called to that necessity by Senator
Lodge, who said there is on deposit in
savings banks In Massachusetts, a total
of $1,000. 100000, which must be pro-
teeted. These banks are all under strict
state supervision, the senator said, and
their lending and borrowing capacity
is more limited than that of commercial
banks.
The bill provides method by which
savings banks win be given ample op-
portunity to invest in securities ap-
proved by the corporation. Similar ap-
plication is made to farm loans, the
Secretary said.
The purpose of this legislation is not
TO restrict the existing borrowing
facilities but to enlarge them, the Sec
retary said He added that under its
provisions insurance companies would
also be enabled to obtain relief by
obtaining loans from the corporation
on railroad or war industries securities.