The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1922-06-08


States entered the war. the treasury
offered the liberty loans which alb
sorbed so much of the peoples money
that private corporations sometimes
had difficulty in getting enough funds
invested in their enterprises to keep
them going. The government recogv
nized that this was injurious. so this
corporation was authorized TO make
loans to enterprises of almost any
character which were engaged upon
work tending to assist in the prosecu-
ton of the war. Some of the COM
panies making war material were In
financial difficulties and loans were
made to them. Street car companies
which carried employees in mupitton
factories to and from their work were
eligible TO receive aid. Many other
companies, some of them seemingly
remotely connected with the prosecu-
ton of war, were found to be perform
ing some duties which helped the
cause and therefore received loans.
Coupled with this function, the War
Finance Corporation Act gave to the
Capital Issues committee. which ii
created. the authority to suppress the
issue of blue sky stocks and bonds.
Ghat is securities of A doubtful value,
in order that funds be conserved for
investment in Government bonds and
legitimate private enterprises.
Help for Cattlemen.
AS the war developed, it was found
desirable. to expand the functions of
the corporation. One of the first ad-
ditional powers it was given was to
make loans to cattlemen on their
stock Il was shown that many cattle
men were killing off their stock be-
cause they could not get enough
money from the banks TO carry them
over the winter. 1t was recognized
that the country must have food, and
that it would be a national calamity
to permit the stoekmen 10 kill their
Immature stock for lack of financing.
Immediately after the .Armistiee,
there was general belief that the ex-
ports from the United States. which
had reached a high tide during the
war. would drop away to practically
nothing. This was regarded as an I'M
desirable development, so steps were
taken to stimulate exports. The be-
lief was that if American exporters
could extend credit to foreign buyers,
the foreigners would take American
goods in substantial quantities. 1t was
arranged that the American exporter.
upon granting credit TO the foreigner,
could then borrow of the War Finance
Corporation which would wait pay
ment from abroad
Affairs developed so that the cor
poration did very little of this sort of
business. A wrong guess had ben
made. Instead of a need existing Tor
the stimulation of exports, they sprang
of their own accord to previously I'M
dreamed of proportions. Much credit
on bankers acceptances thru the
Federal Reserve banks in a manner
which did not require the good offices
of the War Finance Corporation. But
that is another story, which, if fol-
lowed, would open a discussion of the
whole postwar boom and the sub
sequent price recession. At any rate,
little export financing was done by
the corporation and. the war being
over, there was no more of the war aid
financing to be done. The business of
the corporation sagged.
In fact in May, 1920. the board of
directors OF the corporation, of which
Secretary of the Treasury Houston
then was chairman. adopted a resolu-
ton suspending activities. No new
loans were made; the corporations Of
fices merely collected payments on
the loans outstanding.
That summer came the heavy fall
in prices particularly in prices of
farm products. In the autumn an
agitation was started to revive the
War Finance corporation to help the
farmers because people had achieved
the habit of thinking this great gov
eminent bank could be turned to al
most any purpose. There were many
who opposed the revival, declaring
that it was time the government got
After a spirited contest. the cor
poration was revived by congressional
action, and proceeded to make loans
to stimulate exports. 1t had been
urged that II exports of farm products
could be stimulated. price Of these
goods would rise and the American
farmer would be relieved
Then in August. 1921, the corpora
TONS organic act again was amended
TO permit il to make advances on agri-
cultural products, whether or not they
were for export The corporation Gre
ated an elaborate system of commit
tees ramifying the entire country.
ri TT1 t., @ff Loo
agent for the great government bank
at Washington. A farmer. needing
credit. would borrow from his local
bank. The local hank would turn the
would forward it to Washington TO
the corporation. The corporation
would advance money against it. Of
course, not every note made by a
farmer would fit the requirements of
the law and regulations. The farmer
actually got his money from his local
bank but it. in many cases, would not
lend il IL did not know it could pass
the note on to the corporation. In
this way a large sum of money has
been advanced to relieve the farmers
during the last ten months
Railroad Securities Purchased.
Another use the corporation made
OF its funds was to purchase, thru the
director general of railroads, securities
Of American railroads which had been
PtSGSG0 Win the general on
account of additions and betternents
made by the government during fed
eral control When it appeared that
the railroads were in dire need of
funds. following their return to their
owners, the war finance corporation
arranged to sell these securities to the
public, thus raising funds to advance
to the railroads.
A brief summary. will show how
much money this great government
bank has advanced to different groups
of the American people: Advances