The Rock Island Argus and daily union. (Rock Island, Ill.) 1920-1923, 1922-06-05

WdSllQRtOn, L. O.s = =
Once again the fate of the war F1A-
ance corporation, one OF the great
est business institutions ever or
ganized. is dependent upon the view
which congress entertains or It's
usefulness. This experiment OF the
government in the business OF d.
rect financing OF citizens has been
subject several times since its Or
ganization either to change OF pur-
pose or the chance of complete
abandonment.
The War Finance corporation IS
one of the biggest banks in the
world, and it is conducted by the
government of the United States. 1t
has a capital of $500, 100000 in gov
eminent funds, and authority to is
sue bonds to vast amounts.
The original act creating the cor
poration was approved April 5,
1918. This was entirely a war
measure. It will be recalled that
when the United States entered the
war, the treasury offered the Lib
erty loans which absorbed so much
of the peoples money that private
corporations sometimes had diff
Guilty in getting enough funds in
vested in their enterprises to keep
them going. The government rec
ognized that this was injurious. so
this corporation was authorized to
make loans to enterprises of al
most any character which were en-
gagged upon work tending to assist
in the prosecution of the war. Some
of the companies making war ma
terial were in financial difficulties
and loans were made to them.
Street car companies which carried
employees in munftioh factories to
and from their work were eligible
to receive aid. Many other COM
panies, some of them seemingly re-
moteIy connected with the prosecu-
ton of war, were found to be per
forming 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 it created, the authority to
suppress the issue of blue sky
stocks and bonds, that is securities
of a doubtful value, in order that
funds be conserved for investment
in government bonds and legiti-
mate private enterprises.
Help For Cattlemen.
AS the war developed, it was
found desirable to expand the func-
tons of the corporation. One of the
first additional powers it was given
was to make loans to cattlemen on
their stock. 1t was shown that |
many cattlemen were killing off
their stock because they could not I.
get money from the banks to carry !
them over the winter. 1t was rec |
ognized that the country must have ,
food, and that it would be ma /
-ional calamity to permit the stock
men to kill their immature stock for
ack of financing.
Immediately after the armistice.
here was a general belief that the
exports from the United States,
which had reached a high tide dur
nothing. This was re-
,arded as an undesirable develop
nent, so steps were taken to stimu-
ate exports. The belief was that if +
American exporters could extend :,
redit to foreign buyers, the for
igners would take American goods
n substantial quantities. It was i
rranged that the American export
r. upon granting credit to the for
igner. could then borrow of the h
var finance corporation which /
would await payment from abroad. 1
Affairs developed so that the i
did very little of this +:
ort of business A wrong guess
ad been made. Instead of need {
xisting for the stimulation of ex- /
orts, they sprang of their~own ac- {
ord to previously undreamed of I
Much credit actually t
yas given, but it was worked on {
ankers' acceptances through the i
'ederal Reserve banks in a manner {
7hich did not require the good Of !
Ices of the War finance corpora t
on. But that is another story.
hitch, If followed, would open a Il
iscussion of the whole postwar 5
DOM and the subsequent price re- q
ession. At any rate, little export 5
was done by the corpora t
on and, the war being over. there I
as no more of the war aid financ- S
lg to be done. The business of the {
sagged II
In fact in May, 1920, the board of I