The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-06-21
BOARD HAS PLAN TO
AID FOREIGN TRADE
Will Propose ~ Congress That
National Banks Invest in
Export Concerns.
OWEN PROJECT OPPOSED
Plan Permits Banks to Use 8
Per Cent. Of Capital and
Surplus for Purpose.
s,seial DsspascA % TIE sus.

fpecfdt Dtepdfch 20 TIE SUE.
WARRINGTON, June 3o.--A new plan
Tor the financing Of American foreign
rade IL to be presented TO Congress, by
ne Federal Reserve Board. In effect.
he plan calls for the investment in cor
,orations engaged in foreign trade Of
! Der can't of the capital and surplus
II all the national banks Of the country.
such Investment would AFFORD q huge
um for the long time financing Of the
,ountry's immediate and future foreign
hads needs. ....-..-.- .-.-...5-,
the plan was advanced by tho Federal
Reserve Board In lieu OF the Owen plan
nr Government participation in foreign
rade financing. The .Owen plan 10 OPP
posed by the board and by Secretary
plass and they win unite In urging
nrislation empowering national banks
10 invest In foreign trade financing cor
porations. The Reserve Boards position
was made known to-day following q
pesting Of the executive committee OF
he Reserve Board advisory council
TIA committee. headed by James 3.
ForEan Of CHICAGO and with L. L. Rue
II Philadelphia. Daniel q. Wing OF Bos-
Ton and W. 8. Rowe Of Cincinnati, as
members, after lengthy discnssion with
he board issued the following state
nsnt:
Statement Of Commsttee.
sThs board and the COMMITTEES Of the
pouncil were In entire accord that the
matter Of providing long term advances
Tor Europe presented an investment
rather than . banking problem and that
the necessary funds must therefore como
from the investment market II was,
however, the opinion of the conference
hat a. Q step towards supporting the
plan Of financing of our foreign trade.
Il would DO well 70 add new paragraph
10 Section Is Of the Federal Reserve Act
10 permit national banks until January
I. 1921. with regard to the amount
Of their capital and surplus, to
invest not exceeding in the aggregate
per cent OF their capital and surplus
In the stock Of one or more corporations
principally engaged In such phases of
International or foreign financial oper-
atoms as may be necessary to facilitate
the export OF goods from the United
States The board voted to recommend
this leEislation to. Congress"
Could Raise s1oO.ooo.ooo Capital.
The national banks of the country
have to-day combined capital and sur
plus Of very nearly S2.0oo,ooo.o00. II
all Of them chose to invest in foreign
trade financing corporations a capital
for such corporations Of 3100.000.000
would be provided. There were on March
1901 national banks with q combined
capital and surplus Of S1,s60.s3S,o00,
which has increased since that date to
approximately a round two billion.
The national banks. under the amend
ment proposed, would not be forced TO
invest with capital or surplus in for
sign trade corporations. but would be at
liberty to accept anything that looked
ike q good opportunity pa ...,.
While there IL 4 definite time limit
set for investment this does not mean
that the capital and surplus 10 invested
must be nquidated by JanuaEy /. 1891.
Sums invested up to that date can re-
main indefinitely In the stock Of corpor-
atoms organized or selected.
Secretary Glass and all OF his ad-
visors on the Federal Reserve Board
md the advisory council are convinced
hat the need IL for investment and not
lending and loans will not be encour-
aged. They arc likewise q unit in OPP
position to so-ealled paterualism and the
bringing in of the Government aspartner
or sponsor for the operations under
taken, The members favor out and out
private initiative. They regard the for
.ign trade situation as Offering field
Tor safe and substantial investment and
m opportunity for American investors.