The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-03-28
WAR CORPORATIONS
NEED $25O,0OO,OOO
Sets in Motion Plan to Raise
Necessary Sum Through
New Financing.
TO OFFER CERTIFICATES
Amount Wanted Is Minimum
After Exhausting Other
Ways to Aid Roads.

The War Finance Corporation has set
In motion plans to obtain from $780,
100000 to $500. 100000 cash by dispos-
ing Of its own one year certificates of
indebtedness to banks and trust compa-
MES or by using them as agencies to sell
TO the public It's i've year bonds. Bank
ers in this city yesterday received COM
munications asking them to submit sug-
gestions as to the best way or ways of
meeting the requirement. The inability
or unwillingness Of the Treasury to pur-
chase the corporation certificates or
bonds leaves the matter squarely before
the banks and bankers Of this country
and the next important financial devol-
opnent Is expected to be an announce
uent as to the kind of paper to be sold,
the rate of interest and the terms.
The S250.oo0.o0o to 100000 900 men,
toned In the communication IL the min
imum amount left after exhaustion of
other means of financing the railroad
predicament and the active steps were
brought about by the decision of Carter
Glass, Secretary of the Treasury, who
announced in Washington yesterday
that the idea of financing the indebted
ness to the equipment companies
through trade acceptances had been
abandoned. In addition the corporation
needs at least 100000. 900 cash in order
to finance exporters and banks engaged
In foreign trade.
The financial institutions of the United
States have subscribed to more than s4,-
25O.0o0,000 Treasury certificates Of in
debtedness issued in anticipation OF the
Victory Loan next month, but nearly all
heir proceeds have been expended by the
Treasury. 1t is understood that Con-
gress granted permission to the W.
Finance Corporation to raise money on
It's certificates Of Indebtedness up 10
$1,000. 100000 to aid foreign trade, but
did not appropriate from the Treasury
any portion of that sum.
Bankers Would Ala Foreign Trade.
Although the corporation has not set
no any machinery for making loans d.
rect TO exporters or to banks engaged
In foreign trade. II was learned yes
terday that inquiries have been sent to
II by thousands of bankers and export
ers in all parts of the country. Its off
Gals have had under consideration the
theory that foreign trade can be best
aided by making loans to banks to en-
able them to purchase foreign securi-
ties. but bankers hero engaged in in
ternational trade hold different
opinion.
One banker said yesterday that the
War Finance Corporation coule i'm
prove the foreign trade situation by
acting In the case OF foreign bills in the
same way that the Federal Reserve
Banks act with reference to domestic
bills He pointed out that 81 he bought
sixty or ninety day draft on a bank
IN Iowa, he could rediscount It at the
Federal Reserve Bank. but II he bought
similar draft on Buenos Ayres with
documents attached. there was no
method OF rediscounting II and the
paper. which ought to be extremely
liquid. became dead. OF course the
corporation could not discount such a
draft. but 1t could make a loan to the
bank, which would amount for all prac-
ttcal purposes to a rediscount. What
ever the course decided upon, the
amount that will be needed during the
next three or four months will be at
least Slo0,oo0,0 900 cash to aid foreign
trade.
Tho plan for issuing about 5000, 600 =
200 certificates OF indebtedness to the
equipment companies. guaranteed by the
Director General. which could be con-
verified into trade acceptances and redis-
counted at the Federal Reserve banks.
was given up. It is understood. because
The guarantee of the Director-Cenera
concerned. was of doubtful legal force
In case the paper came into the hands Of
national banks.
Another Possibility.
II was said yesterday that n new
scheme ignoring the Director Generals
guarantee by having the railroads issue
three-months' paper for the equipment,
which. after the endorsement by the
equipment companies, could be further
endorsed by the banks and rediscounted
AZ the Federal Reserve banks might be
evolved. Tn the meantime, the corpor-
alton needs cash for the purpose.
While pressing railroad requirements
Oh April 1. estimated at $4,000. 900. in
addition to the corporations direct loan
10 the Railroad Administration of $780,
100000 and the Pennsylvania loan OF
s22.o00,000. are being cared for by GER
tincates of Indebtedness to the railroad
companies. which are to be cleared
through the Federal Reserve banks, the
Administration is gathering data re-
Tarding the May /. June / and July /
requirements.
In letter sent out yesterday It was
pointed out that the situation regarding
pressing railroad requirements at the
end OF April, May and June remains TO
he taken up and disposed OF anew, but
nevertheless confidence that somewhat
similar arrangements, requiring perhaps
more assistance from the banks. can be
IA to- H27o :oa-s@k situation In ~,
following months was expressed. In con-
sequence the railroad men are asked to
Me with the Director General as soon
as possible a statement OF corporate cash
requirements up to and including July
Taken altogether II is evident that the
corporations minimum cash require
ments are $3.50. oo0, 900. and may run to
double that sum. provided that the extra
session OF Congress be delayed beyond
June l.
The situation confronting the corpora
ton was the chief topic of discussion al
Yesterdays daily meeting OF bank Off
cials. In some institutions II was said
that the rate for cash to the corpora
lion between now and the end OF the
Victory Loan campaign could not be a
fraction less than per cent. In other
quarters II was said that the one year
certificates OF indebtedness OF the cor
poration should be floated at per cent,
plus a fractional commission to the dis
tributers. The whole problem is In a
'entat tive stage. but the bankers were
asked 20 send suggestions to the cor
poration as promptly as possible, as the
need OF cash Is relatively urgent Into
what form the suggestions will crystal
lie could not be learned yesterday.
Bank OF England Statement.
III. e.