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.~. ~. ,:' ., ., X-769 Release for the morning papers of March 3~ 1918 tr STATEMENT FOR THE PRESS Washington, March 2, 1918. The Chairman of the Capital Issues Committee of the Federal Reserve Board, when seen today, stated that the work ~f the Committee had. received a decided impetus during the past week. Applications are being received in greater volume than ever and are receiving the greatest possible despatch in consideration. He expr.essed the· desire, however, that in view of th~ fact that instructions were now being distributed widely in all districts, prospective applicants should prepare and subrr,i t their applications as far in advance of the date of issue or sale as practicable; adding that the Comffiittee had been conJiderably puJned to comply with the many requests that had been receiveQ for im• mediate telegraphic consideration of issues the ss,le of ·Nhich was imminent or the necessity of prompt action upon which \lao necessary to meet maturing debts. While, in a number of C.:.:l.:::;es, the Committee so far has been able to meet such requests, it will not be possible in the future to undertake to give a:ivicE: as to the .compatibility of tne large i.3sues of securities coming before it without having received the complete· information. speciiied in its memorandum of instructions to applicants. Even ihen it will be very oft an nece:3sary to refer api,)lica.tions to the sub-committees for further investigation and report. Applicant$ are rec1uested, therefore, to afford the Comiai ttee as much time as pos3ible for the intelligent consideration of contemplated issues. Many applicants have inquired as to the reasons for the activities of the Committee. In reply, the Comillittee has, as a rule, stated its policy as follows: "It is only by subordinating local and personal interests to the public welfare, and by enforcing the most rigid economy in matters of public and private enterprise, as well as in matters of personal expenditure, that the United States can hope to bear its part of the fi-nancial burden of the war and to release sufficient labor and m~terials fo.r war purposes without depletion of its own resources. 11 Attention has furthermore been drawn to a statement in this connection made by Secretary McAdoo reading as follows: 11 W~~ .:::.re engaged in a great war, a war in·wb:i.cb th..; very safety of America is seriously in1perilled. i":e cannot win this war unless every resource of the nation ia car~~ull; "j X-769 ··~ (2) husbanded and used with the utmost intelligence. The great financial operations of the Government, greater than those ever undertaken by any government in the history of civilization, make it essential that every unnecessary expenditure by the government, by the statea and municipalities, and by private corporations and iniividuals be avoided while the war is in progress. Unless this is done it will be impossible for;~he people of the United States to furnish the money which the government must have to support its soldiers and sailors who are shedding their blood for us up6n the battle-fields." It has been most enco~aging to see the hearty response that has been made to the call for cooperation in the CowJittee's work. The Chairman stateQ that in addition to the resolutions heretofore announced as being adopted ~Y the League of Kansas Municipalities, the New York Stock Exchange, and the Richmond (Va.) Real Estate Exchange, the American Bankers' Association and the Secretaries and Officers of the Central States Banking Association (the latter representing fifteen central States) have also adopted resolutions indorsing the aims and purposes of the Committee. Similar resolutions are bein~ adopted by the Investment Bankers Association. The Chamber of Commerce of Boston has adopted the following resolution: "Your committee, therefore, recommends that the Board of Directors of the Chamber bring to the attention of the Governor of Massachusetts the urgent neeQ for economy in municipal financing and requestsHis Excellency to make public a proclamation urging all cities and towns within the Commonwealth to refrain from incurring expenditures and indebtedness for purposes other than those imperatively necessary at this present time of national utress.n In response to inquiry by the Chairman, the Director of Steel Supply of the 1'"'ar Industries Board stated: 11 We are certainly in sympathy with Secretary McAdoo's appeal .for cessation of building operations. We do not feel that it would result in the hardship to labor as generally supposed, as many of the most essential industries are running with greatly reduced forces, and we believe labor would be diverted to more important uses. As regards the steel situation, would state that the supply of structural steel is ample for all purposes, but owing to the curtailment of operations of blast furnaces and steel mills, due to shortage of fuel and inadequate transportation, the pig iron situation is becoming acute and any material incre1.se in building operations would complicate an already bad situation in this line. Many of tJ.1e ir;:portant mills ·:..f the country, including the pl;3.te [JilL::, .:ne h?...vL:-:: t.:'.~.:; -:r:;;.:<.test iiffi-:::~·lty in secur- X-769 (3) ing sufficient iron to keep their plants operating, and as every one appreciates the necessity of plates in shipbuilding, it is obvious that any iron put into structural work which could be utilized to turn out ship plates, \70uld seriously interfere with the successful prosecution of the war. We personally think that everythinG should be done to discoura·ge any structural work or unnecessary vrork at the present time. il The Committee and its Advisory Committee have had two very interesting and helpful conferences during the course of this week~ one with the chairmen of the various suo-committees on capital issues and the other with the War Committee of the National Association of Public Service Commissioners, representing the public service comYLlissions of the United. States. This committee v~Tas represented by Uessrs. Hax Thelen, of California, Chairman, Ralph w. E. Donges, of New Jersey, Joseph B. Easttman, of lilassachusetts, Frank H. Funk, of Illinois, Travis H. VJhitney, of New York, Eclrrard C. Niles, of New Ha.mpshire, and Charles E. Elmquist, Secretary. Members of the Capital Issues Committee •:vere delighted to find that while these Commissioners naturally had to take into consideration their local conditions and requirements they were guided in doing that by the same motives that prompt the ~ctions of the Capital Issues ContrL1ittee. They expressed in no uncertain terms their fvllest appreciation of the national needs at this time, and members of the Capital ISsues Committee have no doubt that the foundation has been laid for a most fruitful cooperation between the representatives of the State and municipal interests on the one hand and those acting at this time purely from the national point of view. !ileasures along these lines are in course of preparation and it is expected that results will be announced shortly. In opening the conference with the Chairmen of the SubCommittees the Chairman of the Capital Issues Committee took occasion to read to them the follov~Ting resolution adopted by the Cor"nnittee: 11 This Comm.ittee 17ill not express an opinion either of approval or of disapproval in matters of new capital issues belov7 the minimum heretofore fixed, but will advise the local sub-committees to discb.ur~ge~;.non essential undertakings irrespective of the amount wherever practicable. 11 and the Chairmen of the Sub-Committees vv-.ere requested to urge upon the members of their permanent and auxiliary committees the necessity of suppressing at the source all unnecessary expenditures at this time, even though such expenditures be X-769 (4) belov; the r.1inimum :..1.0\7 S·3t by the Comr.1ittee. He cited. the instance of a very effective piece of r;ork on the p.J..rt of an auxiliary committee :·.1cmber vv-ho, upon his o·,m initiative, appeared before "the J)Ublic d-:;"ot co::.l::Jiss ion of a cerJcain city and, upon a simple patriotic appeal.) ca.usecl th~t comr.~ission to reduce a cont.er:(._:Jlated. issuejof securities fi'c:-.1 ~~3,000,000 to ~l.)OOOJOOO. If suc:1 effective r0sults can be ob-Gain0c-:. by such simple and C.irect methods by tho sin.=;lo ha.nd0d. .:,ction of an individual, even "\7here the auount involved ·;ras so large, vihat r~1ight not ~:>e accomplished ir.. tho thousa:r:ds of cases of unnecessary expenditures of a1~1ounts not coming vli thin the purview of the CoEtrtd ttee at the prescmt ·cimc? Th0 Chairman statGd to the conf,_;rencc that the following rules of procedurG with r0s~ect to the h~ndling of applications had ".:leGn .:l.doptGd by the .Aclvisory Cou1:'".1i ttee: Applications should be :~2.::.e in d.L::Jlicate and, w·henever possible, should be f:led ·;ri·~h and rccc;iv~.xt. :-:;y the :-::rope:;:- sub-cor.mittec, one copy being rotaincd by the su'b-comr.1i tte0 .;:n5. ·~1:·3 other sent to the C;;,_pi tal Issues Corami t tee ·ah~..;n co::1)let0; Th0 sub-conn:~ittoc .::h2.ll ~:>e recc,10sted. to sec that the form of the c:..:::'):ic.:::.. t ion is suff L:: ient 3..nd. thJ. t ·che info::.;mation fu::nishc.i co::1~:>:ies ·;;ith ·che requircr.1ents of the genc~al instructions; The sub com;::littoe to be re'tluested to (Lefcr invostigation anC.. thG fo:rr:1Ulation of 3.ny recon;·,1eniation until requested by the Ad.vi:>ory Cor.1::1ittee. The Chairrpen of thG Sub Co:J::;itte~Js g;:;n0ra.1:y reported. a r.1ost satisfactory condition of :1earty coo)e:cat ion in every cListrict on the part of :-::unici:Jalities, "bankers, bro1::0rs and others. Some of them, howev0r, Jtatei that in 30~e rare cases the unfortunate attitude had ~).::;011 tak0n :;y certain prospective applicants of heeding peace ;ropagand.a and. lool::ing upon tho Com:Jittee's work as a tempora.ry e:·:j_:)e<;iient th3.t ~.-rould soon become obsolete u:')on the d.eclc:cration cf a. not very c~istant peace. The Chair::1an enphasized. ·~:;.e obvious fallacy of such belief and. stated th.:1t in a:l C..L.:;-~ricts d.etc:t:r]inecl efforts should. be macle to ovcrcor.1e the ;;erniciou;;, tenclencies of such a.n at t i tuc:Le .
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