The Washington times., 1920-05-11
H11stes's etateaent.


AT my request the War Finance
Corporation has suspended the maxi
ing of further advances IN aid 81
exports, except pursuant TO commit-
ments herstofore made. The general
powers OF the corporation expire six
months after the termination OF the
war and special powers conferred
upon II under the Victory Loan Act
expire one year after the termination
OF the war. The continuancs OF .
technical state OF war long after the
time Contemplated when this lsgisla-
tion was enacted and when the con-
ditions which gave rise to II nave
ceased to exist. has presented q prob
lem of no small concern.
''The art creating the corporation
was. passed during the war. In SEN
erai terms. II was Intended that the
should sssist ous,ueas
and agencies In activities for the sue
ccssful prosecution OF the war. After
the armistice when pusiness had suf'
fered q recession In consequence OF
the cancellation Of war orders. and
when there was fear that exports
might decline and unemployment .x-
list. an amendment to the act was
passed Authorizing the corporation to
assist In the financing OF exports.
after direct Government loans to Eu-
ropean governments have for all prac-
tical purposes been discontinued.
business ts prosperous and involun-
tary unemployment 10 negligible. The
export business not only has not de-
cllned but has actually increased. In
the calendar year 1913. total exports
amounted to SO, %. 100000. They rose
In the calendar year 1919 TO S7.922,-
600 900. and for the first quarter OF
this year they greatly exceeded those
OF the first quarter OF last year. OBJ
viously, private interests are not fail.
ing to finance exports.
I'm the circumstances II does not
seem necessary now that the Gov
ernment should continue to intervene
to stimulate exports. particularly as
II Is compelled to resort from time TO
time to temporary borrowing in pc
to meet it's present. obligations. In
existing circumstances, 1t seems clear
that the Government should enter the
borrowing field as seldom as possible
and then for the lowest possible sums
II would be a question whether the
Government should continue to aid
and stimulate exports considering
their present volume privately financ
ed even II the Treasury had surplus
funds. 1t seems clear to me that II
should not continue to do so when the
Treasury has to resort to borrowing
from time to time.
All Stock Ia ussued.
The entire capital stock OF the
War Finance Corporation, $500, ,000, 900,
has been issued and is held by the
Treasury. This and it's reserve fund
OF about &25,000.0OO are invested to
the extent OF about $42e, ,00O,0O0 in
United States bonds, notes and certifi-
Gates OF Indebtedness, and to the eN-
tent of about 100000, 900 in other
loans and investments. Consequently.
IL the corporation continues to make
loans in aid of exports, IL can do so
only by calling upon the Treasury Of
the United States TO redeem securities
Of the United States in which the cap
ital furnished by the United States is
invested, or by selling bonds OF the
War Finance Corporation to the pub
lie. These bonds, although not guar
anteed by the United states Govern
ment, would nevertheless be market
able only on account of the ownership
OF the entire capital by the Govern
ment."