The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1918-02-25
MUNICIPAL BOND
ISSUES Are TO
Be CONTROLLED
Issue of 100000 or More
Will Be Passed Upon by
u. S. Board.

WASHINGTON, Feb. 25.-Every mu.
nicipal bond issue of 100000 or more
hereafter will be passed by the Federal
Reserve Boards Capital Issue Com
mittee before being floated.
BY reducing today from $250,OO0 to
100000 the minimum size of munic-
pal issues which it will consider, the
committee extended its influence over
several times more municipal bond
issues than heretofore.
The committee found recently, after
Analysing pending applications for ap-
prevail Of proposed issues, that the
great bulk of municipal bonds were Of
fered in blocks of less than $25O,OO0,
and therefore were not subject to the
committees restrictive influences.
Federal reserve agents of the II re-
serve banks, who also act as Chairmen
of the subcommittee OF the capital
issue body in their respective districts,
will come to Washington for con-
ference Tuesday, and the general oper-
alton of the new voluntary system Of
regulation of securities issues will be
discussed.
In circular Of instructions to appli-
cants for the committees approval OF
contemplated issues, the committee
and its advisory body, headed by Allen
B. Forbes, explained that the purposes
and circumstances surrounding each
issue must be described fully in the
application.
This is necessary, particularly II
funds are needed for extensions or i'm
provements relating directly to war
production or for .uifillment of any
national state or local governmental
requirements.
in all cases." said the instructions,
full reasons should be given why the
proposed issues cannot be postponed
until after the war or why the neces-
sity is greater than the paramount
need of the National Government in
conserving the financial resources,
materials and labor of the country for
the war"
Details concerning capitalization and
financial condition of a company are
required in connection with applica-
tons for issuance Of stock.
For state county or municipal issues
the committee requires copy of the
bill. resolution or ordinance under
which they were authorized.
it is working with the Federal Bureau
of Public Roads in determining what
contemplated road construction this
year is necessary for urgent military
or economic reasons.
Most roads to which the bureau here
tofore has planned to contribute will
be built even under the capital issues
restrictions, it is said, since they have
been selected carefully on the basis of
their economic Importance.
The support of State Highway Com
missioners was enlisted at a recent
conference with the Capital Issues
Committee. and they will report soon
to the Public Roads Bureau an outline
of their respective curtailed road
building program for the year.
In normal times highway construct
ion and maintenance in the United
States call for an outlay of about $780,
100000 a wear. Officials are inclined
10 the view that this sum will not be
curtailed greatly this year, but that it
will be spent on road vitality necessary
for transportation of war materials.
Projects for building of roads which
cannot be completed for more than a
year probably will be given unfavor-
able consideration, since the Capital
Issues Committee is basing its verdicts
on the usefulness of projects com.
pleted this year. In other words, it is
acting on the assumption that the war
will not last more than a year longer.
Otherwise nearly all capital expendi-
lures would be classed as necessary
and the value of credits priority would
be dissipated.