The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-02-17


bill and the extremely important dis
closures by Secretary Glass touching
the ways and means OF financing the
Government during tho next five months
OF the present fiscal year, the investment
community has been brought face to
face again with extraordinary demands
Of the Treasury as money market IN
huenco of first Importance.
II the estimate that 10000, 900 new
taxpayers viii be reached by the revenue
bill just passed is correct. It is apparent
that public interest IN the law will be
greater than that shown in any previous
tax system placed on the statute books.
Should the Government issue a $4,000
600, 900 loan Just about the time that the
country be engaged in raising a 81, o00.-
ooo.o 900 tax fund, the two Treasury oner-
atoms would constitute the most formi-
dable transaction of the kind that Ameri-
can markets have been called upon to
finance.
1t is evident that accumulation OF a
huge tax fund and effort to subscribe
another great Government loan will give
the public a good deal to think about
during the next eight or nine weeks
Secretary Glass has asked for extraor-
binary powers on the plea that the stu
| alton was unprecedented and that he
could not determine in advance the In
| ducements that would be necessary 10
make the forthcoming loan the pro-
| nounced success that 1t must be in order
, to free banks from the necessity OF
carrying most of the burden
IL would be unfortunate II the loan
were placed chiefly with the banks and
| trust companies, since this is the season
when the banks should keep their assets
as liquid as possible TO enable them tc
| respond to the growing demands OF mer.
camille borrowers Too great emphasl,
cannot be placed on the necessity OF
placing the new loan with genuine in
vestors instead OF with banks. The
! country is in the midst OF a troublou.
readjustment which has brought large
| financial burdens in connection with the
EFFORT to restore trade to a normal ba sis
Overdue War Claims,
Now that the formal negotiation. TO,
the new loan are under way the Govern
ment should see to It that the work OF
adjusting the unpaid claims for war
work should be pushed as rapidly as pos
siole. There are more than 5000 of
these claims outstanding, representing
$780, 100000 to $4,000, 100000. with
large additional claims of sub-contractors
whose bills cannot be paid until the
Government discharges the original in
deotednesss The banks made large ad-
vances on the contracts, supposing that
the loans would be of short duration.
Because OF the stand OF the Comp
troller Of the Treasury that formal con-
tracts which would make possible for the
Government to pay claims for uncom.
pleted work cannot be delivered now
that the material Is no longer needed.
payment has been held up and some of
! the contractors have failed in conse-
quence. Certain Manufacturers have sns-
tanned large additional loss in being
forced to scrap expensive equipment
.dnasmuch as contractors engaged on
Government work made heavy subscrlp-
tons to the previous Liberty Loan
issues 1t is evident that the Government
Will he deprived of important support
for the forthcoming loan Offering " II
does not get through Legislation permit
ing the payment of these perfectly lust
claims before the Fifth Liberty Loan
issue is announced. The situation IL
serious in that other contractors are
likely TO fall unless their claims are ad-
justcd before another series of loans
obtained from the banks mature,
The War Department has lhirty-two
boards organized to adjust claims SO
that machinery is ready to carry the
work TO successful conclusion IL heces-
sary laws be enacted. Should the claims
be adjusted 1t is probable that fully
s1.250,0o0000 in bank loans could be
liauidated and the country's credit posi-
ton strengthened to that extent. Four
teen weeks have elapsed since the armi-
| stice was signed and in that interval
relatively little has been done 10 relieve
the predicament of contractors. who, In
anxiety to help the Government win the
war, went ahead with their work with
out insisting upon delivery to them by
the Government OF the formal contracts
which the law requires.
Coming War Loan.
The Treasury is facing now problem.