The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-04-10
BANKERS DISCUSS
EQUIPMENT PLANS
Railway Administration Will
Give Companies Certificates
of Indebtedness. =
TOTAL DUE S188,OOO,OOO
Meyer Announces Subscrip-
ton to War Finance Bonds
Is Completed.


War Finance Corporation. at the> close
yesterday OF a day Of personal negotia-
ton with bankers In this city. announced
the completion Of subscriptions to the
recently offered 5000, 1000, 900 war finance
one year per cent. bonds and dis
closed plans for financing the t1s3,o00,-
600 owed by the Railroad Administra-
ton to the equipment companies. and
supplies and other speciality companies.
He said that the one year bonds were
well distributed and obvious signs of
slat!on were In evidence.
To the equipment companies ana rail-
way supply and speciality companies. the
administration Is 10 give the same kind
OF a certificate of Indebtedness that II
has been giving to the railroad COM
paniea The equipment and other COM
panies then may pursue one OF three
methods. II they are sufficiently strong
In working capital, they can hold the
certificate in their treasury until the
Railroad Administration gets In funds
either by an Improvement In railroad
earnings or by an appropriation from
the next Congress. II and when it gets
into session. II the companies need
working capital. they can issue a note
secured by an assignment of the GER
tinoate Of Indebtedness and borrow from
the banka As last resort they can
issue note with the assigned certin-
cate as security and borrow from the
War Finance Corporation.
Owing to the approaching Victory
bond campaign the amount OF loans to
be made by the banks to equipment,
railway supply and railroad companies
with the assigned certificates as Sc
curity is moro or lass limited. Accord
ingly the War Finance Corporation ex-
poets 20 make uso of most of the pro-
ceeds OF the $500 100000 bonds by ex-
tending loans to such companies. II
is probable that subsequent to the Vic
tory bond campaign additional War
Finance Corporation bonds will have TO
be disposed Of.
In response to questions Mr.. Meye:
admitted that little progress had been
made IN the direction of making loans
for the extension of foreign trade. but
he said that a great deal probably would
be done In that direction following the
contamination Of peace. He expressed
the opinion that the mere knowledge that
the War Finance Corporation would be
enabled to extend long term credits had
stimulated bankers IN the United States
to extend tho length Of their credits in
International trade and that q big de-
velopment could be anticipated. For the
present Mr.. Meyer Is more concerned
with difficulties OF financing railroad re-
quirements until Congress- shall have OPP
portunity to act and the needs of equip
ment and other companies.
Prior to Mr.. Meyers arrival in this
city yesterday II was announced that
only about SIss. 100000 OF War France
Corporation bonds had been sold and
that the und,stributed balance amounted
to about sI4,ooO.o0 That balance was
taken yesterday. II had been thought
that the Federal Reserve Board ban on
the use Of acceptances in financing the
equipment needs had left those concerns
high and dry. But Mr.. Meyer said that
the use OF certificates OF Indebtedness
was a better method than that OF ac-
ceptances and expressed confidence that
solution Of the whole matter had been
found.
There were reports yesterday that tho
banks were stuck with the War Finance
Corporation bonds on account OF public
apathy and on account OF the lack OF
eligibility for red!scount. On investiga-
ton It was found impossible to make a
generalization. The distribution OF the
bonds depended upon the clientele OF tho
bank a number Of local banks resold
all OF their war finance bonds TO GUS
toners, but others had sold mona OF them.
The bonds are free of the normal income
tax on all of the principal and free OF
all taxes up to $1,000 Of principal. AS
they run for only year they are ex-
peoted to grow In value as they approach
maturity, and barring the issuance of
large additional amounts OF the bonds
following the Victory Loan campaign, 1t
was thought yesterday that the present
issue would become well distributed to
the customers Of banks within few
weeks.
Another Conference Tomorrow.