Highland recorder. (Monterey, Highland County, Va.) 1877-1972, 1918-02-08
$55o0,oOo,0OO
BILL FOR WAR
McAdoo Wants Federal Corpo-
ration to Finance
Production.
TO CARE FOR EXPANSION.
Would Control All Private Issues Of
Securities of More Than 100000
In Interest of Better
Finance.
TO CARE FOR EXPANSION.

made public bill prepared at his d.
rection to create "War Finance Cor
pOration," with capital stock Of $780,
100000, all to be subscribed by the
United States, and board Of directors,
consisting Of the secretary Of the treas
ury and four persons to be appointed
by that official with the approval of
the President.
The corporation Is to have power to
make advances to any bank, banker or
trust company which has outstanding
loans necessary or contributory to the
prosecution Of the war under various
conditions as to such loans and to
make similar advances to persons or
firms or associations whose operations
are necessary for the prosecution of
the war and to subscribe for and deal
in the bonds Of the United States. It
outstanding it's notes or obligations In
an amount not In excess Of IL, ,000,O00,-
900, these notes to be dealt In by the
Federal Reserve banks as rediscount
sued against such notes Of the War FL
nance Corporation.
Under the bill the corporation js to
have among its enumerated powers that
Of investigating and licensing or refus-
ing to license the sale or offering for
sale or subscription Of securities in eX-
cess at par Of 100000. Any person
who may violate this restriction on the
sale Of securities will be liable to a
fine not exceeding $4,000 or imprison-
ment not to exceed two years or both.
The corporation, If created by Con-
gress, will have the power to make ad-
vances to any bank, banker or trust
company (which has rendered fnan-
cial assistance directly or indirectly to
any such person, firm, corporation or
association by the purchase Of its
bonds or other obligations" such ad-
vances, however, not to exceed IS per
cent Of the face value of the loans.
In exceptional cases the corporation
Is to have power to make advances d.
rectly to any person., firm, corpora
tion or association whose operations
shall be necessary or contrlbutory to
the prosecution Of the war for periods
not exceeding five years upon such
terms and such security and subject
to such rules as may be prescribed by
the Board of Directors of the Finance
Corporation.
The effect of the plan would be to
create practically government pool
Of all corporate financing for the pc
.riod of the war and would give broad
powers to the corporation to dictate
into what channels the nations avalla-
BILE credit should be directed. The sys-
tenn would be similar to that MAN.
tanned by Germany and much more
centralized than the British system,
which relies more on voluntary TO-
operation of financiers in aiding The
enterprises approved by the treasury.
Railroad financing would not be in
cluded, as this is to be managed by the
railroad administration.
Most loans would be for a period of
five years or less and would be made
only to the corporations or enterprises
which could not get new capital
through regular banking channels. In
terest rates would be determined by
the corporation. Advances TO savings
banks would be for 90 days, and loans
direct to war Industries would he made
only In exceptional circumstances,
most financial transactions being sent
through banking channels. The corpo-
ration would have life of ten years,
but would be compelled to start liqui-
dating it's affairs within six months
after the end Of the war;