New-York tribune., 1919-03-30
British War on
Restriction of
Capital Issues
Ready to See Pound Go to
$4 Rather Than Lose
the Advantages Arising
From Export of Capital
By George w. Glass
NoW J OrIc 7 rfbuno Q
European Bureau

4 ONDON, March 30. - Criticism of
governmental DEGREES, which was
silenced by reluctance to cause en-
barrassment during the war, is apt to
break out in full flood, now that the
national danger is past. Financially
Parliament and the business commun-
ity are alert and watchful and the
executive has just had experience of
the close scrutiny to which all its ac-
tions will be subjected.
Few war measures created more dis
satisfaction than the arrangements for
the control of fresh issues of capital,
although none of consequence denied
the right of the government to put it.
self in g position to secure first claim
on the resources of investors. None
tary power was all important and the
authorities were justified in devising
means to restrict the creation of
capital to purely war requirements. No
legal powers were taken for the pre-
vention of unauthorized issues, but
with the cooperation of the stock ex
changes of the country it was pos
siblc to prevent negotiation through
the natural channels of securities sold
in defiance of the governments wishes.
This eXpcdient proved almost COM
plctely effective because few would be
prepared to invest money in stocks and
shares which could not be realized or
only with considerable difficulty and
perhaps at a bad price. Every now
and again capital was offered without
consequence thought it worth while to
drive through the semi Official orders.
Accepted, Not Indorsed
But acceptance of the restrictions
did not imply a widespread indorse-
ment. The committee set up by the
Treasury to consider applications for
permission to make appeals to in
vestors and to grant or refuse them
exercised its powers in very arbitrary
fashion and some of its conclusions
lacked both logic and common sense.
A reversal was necessary upon more
than one occasion, and the impene~
trable veil with which it's procedure
was screened, even from those vitality
interested, caused it to be likened to
star chamber. The principles upon
which it acted-some said there were
none and that its decisions were mere
ly capricious-were never made clear
and none was allowed to approach the
sacred presence. The committee said
yes or no, often after prolonged and
ineXplicable delay, and refused point
blank to admit oral evidence III sup
port of an application.
Nothing but high sense of duty
while the country was in danger would
have induced those concerned to toll
crate such methods 1t was always
certain that when circumstances be-
came favorable for giving voice to
no hesitation in indulging some very
straight talk. The government on its
part was fully aware OF the hostility
! which had been aroused and ventured
on steps which it believed would fore
/ stall the storm. Instead of this it
! managed to create veritable tornado,
a.-d the Treasury spokesmen in Parlia-
ment have found it difficult matter
to restore calm. A new set of reg
ulatiors were issued and the provi
sions which involved various conces-
sions were an admission that appi-
cations would require to be dealt with
in II much more generous spirit
Qualified Approval
In some ways the revised rules pos
scssed considerable merit if it be ad-
mtted that restrictions of any kind
were still necessary. The decisions
Of the committee were given Il legal
status by bringing them under the
Defence of the Realm Acts. This in
volvcd the severe penalties carried by
/ ID. O. r. A. for any transgression of
the modified orders. 1t may seem
strange that the more drastic pro-
cedure should only be decided upon
when the time had arrived for much
greater lbcrality, but oiiicialdom does
strange things. Much of the trouble
which has now been created would
not have arisen if d. O. r. A. had
been in possession ali along, but since
it was otherwise the new method was
no bad thing, inasmuch as it put every
one on an equality.
But in attempting to go further and
precnt future dealings in any form of
security which had not been authorized
since January, 1915, when the new
issues committee was set up the gov
ernment made transparent blunder.
Its intentions were sound enough. IL
was anxious to recognize the patriotism
of those who had stood by the COM
mittees rulings and at the same time
to remove handicap from the Stock
Exchanges which engaged in transac-
tions only in authorized issues and was
obliged. to stand up while other organ
izations were conducting business IN
securities which had not been officially
sanctioned. But its zeal caused 1t to
seek powers far exceeding what were
necessary or desirable and whose lit
crnl Interpretation would have placed
an embargo not only on the few unau-
thorized shares and other issues pub
licly made, but on multitude Of bust
ness arrangements which were in no
way subject to Treasury control This
provoked protests OF nature threat
cning trouble for the government. and
il became necessary to hold the regu-
latlons In allegiance pending reconsid-
crntion OF tho whole subject.
At last tho government has paid
some heed to the powerful and growing
body of opinion which called SO loudly
for the complete termination OF Official
Interference. 1t haa removed tho re-
attctons oil capital issues for domcs~
tic purposes. But the ban on tho OK
port OF capital remaining, although
. IA