Pullman herald. [volume] (Pullman, W.T. [Wash.]) 1888-1989, 1922-02-10
Original Act

The war FlndHCe WI POI atlOh'
Tho act creating the same was APP
nroved April 3, 1918, and was origi-
ao1,v created as war agency as its
name implies. The War Finance
cornoration was empowered by con-
nrees March, 1919, to assist in the
tost of the reconstruction and to
nromote commerce with foreign ma
.;ore IT assisted in the financing of
oxnorts and this authority was ex-
orcised until May 1920, when the
activities of the corporation were
suspended.
This act provided that the secre-
tory of the treasury be the chairman
Of the board of directors and that
four other directors be appointed by
tho president of the United States
with the advice and consent of the
senate: further providing that com
nonsation of any director should not
exceed $4,000 per annum.
Capital
The capital of $50,000,000 was
subscribed by the government, sub
iect to call by two-thirds of the board
Of directors with the approval of the
secretary of the treasury at such
time or times as the board might
deem advisable.
The Amended Act
In the autumn of 1920 when the
relapse in commodity markets be-
came acute the question of our eX-
ports again became a matter of gem
eral interest, and congress, in jan
uary, 1921, adopted a resolution to
revive the activities of the War FL
nance Corporation. The evident in
tent of congress and the conditions
throughout the country caused the
directors to give first consideration
to the development of methods for
the financing of the export of agri-
cultural commodities. Since raw
cotton is our greatest export product
it received first consideration.
The situation was fully canyassed,
meetings were held in various cities
with exporters and with the secre-
tary of the treasury in attendance.
1t developed in these meetings that
the situation in Europe had changed
and while in the past business men
were willing to finance the cotton
shipments, they had found, owing to
the depreciation in the exchange
rates and the heavy losses that they
had sustained, that they could not
contract ahead for goods, which
would have to be paid for in dollars
facture even in raw form, in terms
of European currency
The corporation, to meet this sit
uation, offered to make advances to
finance the carrying on stocks Of
American cotton in foreign ware
houses and so advances were made
for this purpose. It proved, how
ever, that even this assistance did not
solve the problem and that it was
desirable to make advances on cot
ton stored in America, which was
under contract for sale to foreigners.
Even with this added facility appli-
cations were not sufficient to be
much of a factor and further steps
We're necessary.
They then agreed to make adj
vances Of $5,000,000 to a co-opera-
tive association in Mississippi to fl
nance the carrying of 100000 bales
OF long staple cotton until it could
be exported in an orderly manner.
This announcement stimulated con
siderable of interest and it was only
short time until the corporation
had authorized advances to co-opera-
tive associations in Texas, Oklahoma
and Arizona as well as to many bank
ing institutions in the South to III
nance the cotton industry while the
goods We're being marketed.
1t seems pertinent at this time to
call special attention to the fact that
while it provided for the carrying
OF goods for orderly marketing if
specifically stated that it was not
10 encourage holding for speculative
purposes and it provided with the
various associations that the mer-
chandise pledged as security for the
loan would be exported within a
year at least a sufficient amount
TO pay the Indebtedness.
1t seems to. me that this is one
point that should be brought out
clearly. If 7 interpret the meaning
OF War Finance Corporation opera
.ions correctly it is to assist us dur
ing time when the markets are
s'agnant for temporary period and
tuat 1t is decidedly not for the pur-
pose Of encouraging speculation in