South Bend news-times. (South Bend, Ind.) 1913-1938, 1918-02-08
NJ 'ADOO SAYS
MEASURE WILL
AVOID DANCER
500 Million Dollar Corpora
tion Will Delay Necessity
For Issuing Paper UnSe-
cured by Gold Reserve.
InternatLonaI So -.

International News Service.
WASHINGTON. Feb. S.-The
United States may have TO come to
the practice of issuing "a form OF
money, back Of which there is no
gold reserve. If the war continues
long enough. Sec'y OF the Treasury
McAdOo made this statement today
10 the senate finance committee He
argued that the immediate passage
Of the $500. 900. 600 war finance coz
porauOn lill would fOrstall this ana
make the issuance Of uncovered pa
per last resource. when the H.
nances OF the nation are drained.
Urging prompt passage OF the biN
Mr. McAdOO read a prepared state
ment explaining in detail the pur-
poses Of the bill. He declared that
the throwing OF Liberty bonds and
other government loans upon the
money market had tended TO pre-
smpt capital SO that business. in
cluding many enterprises essential
10 the conduct Of the war. were find
ing il well-nigh impossible 10 sell
their securities.
Would End Practice.
He said that the bill would Go
away with the present practice 4
the war department and shipping
board in advancing 80 percent OF
contracts 10 enable contractors 10
speed up war work. He called this
"a bad practice
The bill would place the problem
OF financing new war enterprises In
the hands of the treasury depart
ment where il would be handled
more scientifically. ne pointed out.
Mr.. McAdoo declared that another
effect Of the measure would be 20
allay apprehension among the saw
ings banks and throw off the danger
OF the withdrawal Of deposits.
Sen Smoot asked If the war i-
nance corporation wouldn't issue un-
covered paper.
In no sense does this oil provide
for an issue OF uncovered paper
answered Sec'y McAdoo. we may
have 70 come 10 that. bur for the
present it can be most easily avoid
ed by the passing Of this war G-
nance corporation bin. which viii
utilize the entire credit OF the c0un-
try in war making"
To Prevent Expansion.
Sec'y NcAdoo declared that the
bill would be a measure 90 prevent
unsafe expansion He declared that
the provisions for licensing secufi-
ties would control the banks in their
loans and prevent the issuance Il
securities except upon sound
basis He declared that similar
schemes are nov in operation "A
England, France and German
The bank Of England is prac-
ticany a war finance corporation
Sec'y McAdoo said.
This bill will utilize for war pu--
poser ne revolving credit of the en-
tire industries Of the United States
Secy McAdoo said
Sen. PenrOse criticised the bin
because it placed the power OF ape
pointment OF members OF the COR
poration ir the hands Of the secre-
tary Of the treasury.
Mr.. McAdo0 said he didn't con-
slider the provision material and
that congress could eliminate it f u
wished.
The secretary said ne considered
Il a rather severe RESTRICTION q" pre-
vent the directors Of the war finance
corporation from occupying any
other relation with banking insutu-
tions. He said II would limit the ae,d
OF selection but expressed the opIu-
ion that ia would be possible to eet
some good men 20 make the recea-
sary sacrifice
Would PrOtcct Banks.
Some Of the republican senators
showed much concern over the cone
dition OF the savings banks ana
urged that every protection De eS-
tended 20 them. Mr. AIcAdoo de-
clared it would.
The secretary stated also tha- one
Of the purposes Of the bin was 70
aid the farmers
Sec'y McAdoo stated that The vas
hnance corporation would stabilize
the price OF Liberty bonds
This afternoon GOV Harding =
the federal reserve board and Paul
". Warburg appeared before The
committee. Sec'y McAdoo viii re-
sumo his testimony on Monday.