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ADDRESSES
delivered fcy

JAMES H. BEAL, Esq.
MR. D. C. WILLS
DR. J. T. HOLDSWORTH
at a luncheon given
ip the

SUB-COMMITTEE ON
CAPITAL ISSUES
FRIDAY, JUNE 28, 1918




WILLIAM PENN HOTEL
Pittsburgh, Pa.

ADDRESS OF
JAMES H. BEAL, Esq.
(of Reed, Smith, Shaw & Beal)

Before introducing the speakers who are to address
you, I have been asked to say a few words regarding the subject that brings us together today, and I am going to ask you
first to look back and recall the situation as it stood less than
a year ago. I think you will agree with me the changes
which have taken place in that brief space of time are beyond
anything deemed possible by any of us at that time; and that
today we are accepting and submitting readily to legislation
and to regulations, vitally affecting industry in every department, and vitally affecting our living, which none of us, or at
any rate few of us, at that time considered possible. With
the development of the duty imposed upon us by our entrance into this world war, and the gradually growing realization of the immensity of the task before us, we have had
legislation which a year ago business men would have said
could not possibly be accepted, and which lawyers generally
would have considered entirely beyond the power of Congress to enact. In some cases by voluntary action, in others
under authority of legislation enacted by Congress, prices
have been fixed at which a large part of the articles of prime
necessity are and must be bought and sold today. This is true
of many articles of food; particularly true of so fundamental
a necessity as coal; it is true of steel and many of its products;
it is true of copper,—and true of all great fundamental raw
materials required in the business life of the country. But,
the government has not stopped there. It has regulated not
merely the price, but the use, and is now proceeding to limit,
and, in some cases, to prevent entirely the use of needed materials for purposes not deemed essential in the successful
prosecution of the war. I think you will all agree with me
that of all the articles of necessity, none exceeds in its essential character money, and that which is money's equivalent,




labor; for it is only by the application of labor by the use
of money that these prime necessities are vitalized and made
efficient instruments for the successful prosecution of the
war. And so it comes about that Congress has passed the
War Finance Corporation Act, recently approved by the
President, for the creation of a Capital Issues Committee,
with control over the sale of securities where the amount of
the issue exceeds one hundred thousand dollars. In other
jvords, unless this committee deems it, in the words of the
act, "compatible with the national interest" that such securities be sold, then the sale is prohibited.
Now, the purpose of this legislation is, to my mind,
identical with the legislation regarding food and other articles of prime necessity. The great bulk of the vast wealth of
the country is represented by fixed property of one kind
or another, and all of this together constitutes a capital sum
absolutely required in carrying on the business of the country. The conditions created as a result of this modern war
make more necessary than ever the employment of this fixed
capital in the carrying on of the great industries of our country, all of which must be maintained for the successful carrying on of the war. So that, then you have left over only
the net income or net saving resulting year by year from the
work which that capital does, and out of this net income
there must be provided the additional capital required for a
constantly increasing population, a constantly increasing
business, and steadily mounting prices, involving larger
working capital for the companies carrying on that business.
Out of this saving must come also the money,—the taxes,
—required to maintain the various State and local governments, and as well the vast amount required by the Federal
government for use directly in paying the expenses of this
war, whether contributed in taxes or the purchase of bonds.
Therefore, it is that the conservation of capital becomes of the utmost importance, and in order to conserve
capital, expenditure must be limited to those matters essential. It is only by concentrating on the essentials that we
can hope successfully to prosecute this war.



Now, this committee, in carrying on the work for
which it has been created, and which will be more fully explained to you by the speakers today, is entitled to and needs
the assistance and co-operation of every banker, every lawyer and every business man throughout the whole country.
And here I would like to say,—and say without giving offense to anyone,—a word of caution to bankers and
lawyers regarding this legislation. There seems to be a
prevalent idea that where an indebtedness has been incurred,
that what is taking place is really the issuance of securities
to represent that debt; and that that is not within the act.
That is true of the act as it stands today so far as concerns
the refunding of indebtedness which existed at the time that
the act was passed; but I think it is the duty of every lawyer
to impress strongly upon his clients these two facts, first,
that Congress, which enacted this law, can, if it sees fit,
change it tomorrow, and entirely take away the right of refunding which now exists; and, secondly, that as to the
future, it would be a very dangerous practice to accumulate
indebtedness with the idea that subsequently securities may
be issued and be treated as a mere refunding, for the client
may find himself in the position of having indebtedness
which he must carry to the end of the war, no matter what
may be the hardship to him.
And to the banker I would suggest that it is not
only his duty, but his self-interest requires, that he carefully look to the loans that he makes, for he may find himself in the position of having to carry the obligations which
he takes to the end of the war, without help or assistance
from the government.
It is, perhaps, not out of place for me to make one
further observation, and it is this: When Congress began
the enactment of this kind of legislation, there was much
discussion among lawyers and business men as to its validity, and general doubt expressed of the power of Congress to
so legislate. Much, if not most, of this doubt, I think, has
disappeared in the few months that have gone by. But I
want to express to you as strongly and as earnestly as I can



that in my opinion this legislation is entirely valid and
within the constitutional power of the Congress of the United States. You must remember that we are in the midst of
the greatest war the world has ever known; you must remember that the Constitution of the United States gives to
Congress express power to declare war, and I think it necessarily follows from that,—I do not see how anyone can escape the conclusion,—that, given the power to declare war,
there goes with it the power to adopt any and every measure necessary to the successful prosecution of that war, and
as to what constitutes a necessary or proper measure for
that purpose, Congress is the sole judge, for the question is
legislative in character. Therefore, I say to you, in my
opinion as a lawyer, there is substantially no limit to the
power of Congress in respect of legislation of this character,
aimed at the successful prosecution of the war, no matter to
what extent it may impose hardships, and even financial loss,
upon corporations and individuals. And the more firmly we
stand for that doctrine, the more we enter into the spirit of
this legislation, both bankers and lawyers, and give to this
committee and to the other agencies which are endeavoring
to carry out these laws, our firm and full support, the surer
we may be that the war will end successfully, and the more
energetic we are in that support, the sooner will the war be
over. In the curtailment at this time, every energy must
be devoted to the one prime purpose of our life today,—the
winning of the war. Everything else must be put aside until
that is done. Corporations and individuals, in supporting
this committee, must cut out every expense not absolutely
required and calculated to advance the winning of the war.
Municipal corporations must curtail their improvements in
every direction, so as to save money to help win the war.
In so far as it is practically possible to do without them,
there must be no expenditure for new schoolhouses, new
churches, new dwellings and the like, though in ordinary
times these would be deemed essential. If we all stand together in this, we can do much to help this committee in its
work, and this it is our duty to do.



ADDRESS OF

MR. D. C. WILLS
Chairman of Board and Federal Reserve Agent.
Federal Reserve Bank, Cleveland, Ohio.

The successful prosecution of a war, and particularly
of a war of such magnitude as that in which we are now
engaged, entails the concentration of all economic as well
as military forces for the attainment of ultimate victory.
Unless all these forces are marshalled in the same common
cause, success has little chance of becoming a reality.
There are, however, several major forces without
whose aid success cannot even be dreamed of. Wholly apart
from the concentration of military man-power, there must
be drawn up on the economic battle line the Nation's capital,
the Nation's raw material, and the Nation's labor power, as
distinguished from military man-power.
To expend the enormous capital of the United States
on projects which have little connection with the successful
termination of the war, to permit our great resources in
material and labor to flow in peace-time channels with little
or no alteration due to war conditions, is a grave mistake.
The purpose of the Capital Issues Committee, which committee I have the honor of representing here today, is to
conserve the three forces just mentioned—capital, labor and
materials.
You may be interested in knowing something of the
history of the Committee. In the latter part of January,
1918, the Secretary of the Treasury addressed a letter to
the Federal Reserve Board and asked that body, whose influence upon the financial affairs of the country is so pronounced, to form a voluntary committee whose function it
would be to pass upon the issue of securities, mainly of
stocks and bonds, as being compatible or incompatible with
the interests of the United States in time of war. No attempt was to be made to pass upon the legality or security



of proposed issues except as those features might bear upon
the major question of compatibility.
As you have no doubt already heard, the Committee
at its inception had no legal status, submission to it of proposed issues was wholly a voluntary consideration, and no
legal penalty was prescribed for violation of its mandates.
Along in the early part of April, however, Congress passed
what all of you know as the War Finance Act, which, in
addition to creating a corporation unequalled in magnitude
in all the country's history, also provides for the creation
of a committee known as the Capital Issues Committee.
At first there was incorporated in that part of the
bill creating the Committee, a penalty for failure to submit
proposed issues, as well as a severe penalty for disobedience
of the Committee's orders after a disapproval had been
forthcoming. Congress, however, being largely influenced
by the experience of England in its regulation of securities,
passed the bill with the teeth taken out of it, so to speak,
and left the submission of issues for the consideration of
the Committee almost as wholly voluntary as before, but
gave the Committee itself a legal status which before the
Act it had not enjoyed.
From the very beginning and long before the War
Finance Act became a law, there was evidenced on the part
of the reputable financial interests of the country an admirable spirit of patriotic co-operation, and in many, if not
in the majority of cases, it was found practically impossible
to market securities in reputable channels without the approval of the Capital Issues Committee. The great stock
exchanges of the Nation required the approval of the Committee as a condition precedent before permitting issues to
be listed, and bond houses, through which nearly all of the
municipal issues of the country are marketed, in many
cases practically went out of business rather than operate
against the wishes of the Capital Issues Committee.
The great evil with which the American public has
had to grapple is its tendency toward extravagance. As was
said by Hon. Paul M. Warburg, Vice-Governor of the Federal



Reserve Board, in an address in New York before the National Conference on War Economy, quoting Earl Kitchener,
—"Either the civilian population must go short of many
things to which it is accustomed in times of peace, or our
armies must go short of munitions and other things indispensable to them."
The statement of Lloyd George in the same connection is even more striking: "Extravagance costs blood,—
the blood of heroes."
The first great task with which the Capital Issues
Committee has had to deal is to awaken the public to a realization of what Mr. Warburg meant when he said: "The
present emergency requires that the country be aroused to a
thorough consciousness that whoever uses material, credit,
labor or transportation unnecessarily is placing a handicap
upon his Government in its efforts to complete its preparations as speedily as possible. Instead of aiding his Government he competes with it, bars its way, and makes himself
guilty of delaying its progress toward victory."
The Capital Issues Committee has been forced by
reason of a large number of applications of that character
substantially to curb the building of new roads and new
streets. The District Committee of Cleveland (of which committees there are twelve throughout the Nation) has been
advised that there are only two reasons for approving the
building of new roads and new streets at this time. The first
is military necessity, and the second is the most urgent, the
most undoubted, the most imperative economic necessity.
The District Committee has found, however, that any set
test is unfortunate, and is forced in the majority of instances to consider each case upon its merits.
The Committee has taken the position that unless
and until Washington advises that a given road is a military
necessity, it is not, and hence its construction is not a justifiable activity at this time; but with regard to economic
necessity the exception has reduced itself practically to the
situation where a road or street must be well-nigh impassable before its reconstruction can be considered.



Quite in keeping with its policy toward new roads,
the Committee has been forced to look upon the building of
new schoolhouses, eminently desirable in times of peace, to
be wholly unjustifiable in the great majority of cases in
times of war. It will astonish those to whom the subject is
not familiar to know that since the outbreak of hostilities
in 1914, England has not built a single schoolhouse with the
exception of some temporary structures erected at Coventry
for the accommodation of children of munition workers.
It is the opinion of the Committee that municipalities
as well as individuals have failed to grasp the vital necessity
of curtailing expenditures. The total bonded municipal indebtedness of England incurred in the year 1917 was
$500,000, and yet it is not uncommon for the District Committee to have before it at its meetings, which are held in
the neighborhood of once a week, two or three municipal
applications each considerably in excess of the total municipal bond issues of England for the year 1917.
It is our wish, particularly with regard to the large
cities located in the Fourth Federal Reserve District, that
before the trouble and expense of elections authorizing the
issuance of bonds has been incurred, an informal program
be drawn up and submitted to the District Committee for
the sake of obtaining from that Committee a rough idea of
those things which would stand some chance of being approved. In this way it is believed that time, money and
labor will be saved, not only for the municipalities themselves, but for the District Committee also.
While the Committee has no legal power to pass
upon the building of schools when the money is already on
hand and no issue of securities is involved, it has been its
policy consistently to discourage the erection of such buildings and to make its appeal to the proper authorities for the
right kind of patriotic co-operation. It succeeded in the
case of a city in northeastern Ohio in causing the postponement of the erection of a high school building whose
cost was to have been in excess of $550,000. Washington
has recommended that temporary structures (and by tern


porary I do not necessarily mean portable) be used by school
authorities to relieve over-crowded conditions, and that the
Platoon System also be used as a way out of difficulty. In
short, any expedient which obviates the necessity of building should be resorted to and is greatly to be encouraged.
The policy of the Committee with regard to the
erection of buildings for non-essential war purposes is precisely the same as with regard to new schools and new roads.
The building of additional and costly theatres, of monumental buildings of all kinds and descriptions, of garages,
churches, office buildings and elaborate homes is to be discouraged for the same reasons that justify the very existence of the Capital Issues Committee,—the conservation
of capital and the use of labor and materials.
The chief enemy to the successful prosecution of the
work of the Committee is the specious argument. Through
the proper authorities, the building of a costly hotel in a
city in central Ohio was recently postponed, and at the conclusion of the decision of the hotel authorities not to build,
the ire of a local citizen was considerably aroused. As is
true in a great majority of cases, he immediately referred
to the city Liberty Loan total which had been subscribed
230%. The hotel proposition, as far as raising money was
concerned, was assured of success. The argument of this
gentleman was to the effect that these two facts showed
two things: the first that the city in question was able to
handle all Government financial demands put upon it, and
also, as he expressed it, to finance its "ordinary industrial
needs." Looking at the mere surface of things, his argument is sound, but if we dig deeper into the principles underlying the situation, we are confronted with a grave question. If we permit a half million dollars here and a million
dollars there, and three hundred thousand dollars somewhere else to go into the non-essential, such as a new hotel,
we shall not be able to subscribe our future Liberty Loans
230% or 200%, or even 100%. Just as surely as we fail
to curb the non-essential activity in whatever disguise it
masquerades, just in that proportion will our future Liberty



Loan campaigns necessarily be failures. Capital, like
physical endurance, has its limits.
The proud boast of London, and indeed of all England, during the first year or two of this great world conflict
was "business as usual," and I think I am not incorrect in
saying that the man who in England today voices a sentiment of that sort would quite apt to be considered feebleminded. Mr. Warburg, in his speech above referred to,
strikingly speaks of just this situation in the following
language: "That it is necessary to keep on selling luxuries
in order to finance the war is too preposterous to be seriously
considered."
Bearing in mind, then, the policy of the Capital
Issues Committee with regard to the erection of new and
costly schools and of buildings of any description to be used
for non-essential purposes, and bearing in mind that the
Capital Issues Committee is exceedingly anxious that the
public utilities of the Nation, whose finances in many cases
are in a most deplorable state, be given every opportunity
to perform their proper functions toward the community,
it becomes interesting to inquire what will happen in case
the wishes of the Committee are openly defied, and I regret,
gentlemen, to state, although it is quite contrary to the
usual rule, that two or three such cases have occurred. A
mere glance at the bill itself will convince you that the offender will not go to jail, will probably not be subject to a
fine, or be capable of being restricted by an injunction, but
there are actions that can be taken against those who persist in acting in defiance of the Committee's rulings.
Whether it will be necessary to resort to the use of these
methods, penalizing offenders and demonstrating that the
Committee's rulings may be made effective indirectly, is a
matter for determination by the Capital Issues Committee
at Washington, and I have no information as to their intentions along these lines.
The following actions could be taken that would, in
my opinion, have the same effect as if the law itself contained a penalty:



1st. That in the proper periodicals a list of those
companies coming within the jurisdiction of the Capital
Issues Committee, and who have refused to submit their
propositions, or, having submitted them, fail to abide by or
openly defy the wishes of the Committee, be published at
suitable intervals throughout the country.
2nd. That through co-operation in Washington
with the War Industries Board, all railroad priority or railroad facilities be cut off; similar action also to be taken in
respect to fuel.
3rd. That the Federal Reserve Banks might refuse
to rediscount any of the paper issued by such concerns.
Fortunately, as I have stated previously, with the
great majority of Americans a mere hint at their patriotic
duty is sufficient.
Now just a word about detail. The Committee has
legal jurisdiction only of those issues of securities in excess
of $100,000, with this proviso, however, that where since
the passage of the Act on April 5, 1918, a municipality,
partnership, association, or individual once exceeds the
$100,000 mark, all future issues must have the approval of
the Capital Issues Committee, regardless of amount.
Now, what is the test for jurisdiction? Is it the total
authorized capital, or is it the amount of securities to be
floated at this time ? It is the latter, gentlemen, and on this
point I desire that you be quite clear. The District Committee of Cleveland has succeeded in obtaining the wholehearted co-operation of the Blue Sky Commission of Ohio
and the Secretary of State of Kentucky, so that it is advised through these sources of all issues in these two States
which come within the jurisdiction of the Committee. In
this way it can be seen that the work of the Capital Issues
Committee is not purely Federal, is not purely that of a
State, but is national in its scope, and is based not on imaginary lines primarily but on the needs which the dangers
of war have compelled us to recognize and provide for.
Please bear in mind that the District Committee in
Cleveland is only advisory in character, except with regard



to issues of securities below $100,000, and submission of
these matters is, at the request of Washington, to be encouraged, even though not legally required. The Capital
Issues Committee in Washington is the Court of last resort, so to speak, and from it will come the final approval or
disapproval of a given issue. The question arises and is no
doubt in the minds of some of those present, whether the
jurisdiction of the Committee attaches in case of an increase
of capital stock, whether it attaches in the situation where
a stock dividend is declared, whether it attaches where a
municipality has a considerable number of small issues each
in themselves under the $100,000 mark but in the aggregate
considerably above it, and to all of these questions I desire
to answer that it does.
Perhaps the prime purpose in a talk of this character, aside from acquainting those present with the functions
and aims of the Capital Issues Committee, is to gain your
assistance in choking off the non-essential enterprise, not
after contracts have been let, obligations incurred, and
money expended, but at birth, at very inception. As
financial advisers to this great community, I am asking you
that when a customer consults you with regard to the incorporation of a company to be engaged in a non-essential
enterprise, you will be able to put your finger on the key to
the situation, so to speak, and tell the person that he has a
hopeless case and that to push it is to waste his time and
money and that of the District Committee and of the main
committee in Washington.
If these unquestionably non-essential activities would
never attain the dignity of an application but could be
choked off at the start, it would give to the Committee an
opportunity to give more careful, more deliberate, more
painstaking attention to the countless cases which lie in
the border-land, and which at least have some semblance of
being essentials.
Might I also point out the duty of bankers during
the war and their opportunity, too, of restricting, and,
wherever possible, eliminating non-essential loans? It is



just as important and essential to limit the amount of capital that goes into non-essential enterprises when the funds
are raised through loans made at banks instead of through
the sale of securities. In fact, some of the most difficult
problems that we have had to handle in our Committee have
been those where bank credit has been obtained for a nonessential enterprise and commitments and contracts made
with the purpose of issuing securities later. Bankers will
be doing their country a distinct service at this time if
capital loans in the form of promissory notes or stocks or
bonds for non-essential enterprises are discouraged.
I hope that you are discouraging throughout the
Pittsburgh area the mistaken practice of many stock salesmen and many merchants in taking Liberty Bonds in payment for their wares, and I hope that during future Liberty
Loans you will see that no stock, no bonds of any description, whether passed by the Capital Issues Committee, or
not, are offered during such campaigns.
And just let me take one crack at the man who
claims that because of transportation conditions there is no
use in making essentials, for the reason that, being manufactured, they cannot be transported, and hence that local
manufacture of non-essential goods for domestic uses is
much to be preferred to the manufacture of raw materials
absolutely essential for general use throughout the country,
but which cannot at the present time be transported. Gentlemen, the greatest anxiety of the German Empire today is
where after the termination of the war it will get its raw
materials. As Mr. Warburg says, "If Joseph could return
today and foretell the future to Pharaoh, he would predict
that at the end of this war there would be a great famine
of raw materials, and he would urge those in power to acquire and store up whatever supplies of food stuffs, cotton,
or other similar raw materials the country might be able
to save and accumulate. Whoever controls the raw materials
will hold the key to commerce and finance, not only because
he who can sell need not send gold, but also because control
of raw materials will give an invaluable advantage to the



manufacturer competing in world markets. Our gold reserve at this time is the financial backbone of the allied
cause. Let us add to our 'gold* reserve a 'goods' reserve.
And so, gentlemen, it is the hope and the function of the
Capital Issues Committee to see that our material resources
are not squandered in those activities which do not paydividends in Victory.
The Committee will make many mistakes, it will
work some injustice, but we are conceited enough to be convinced that it will also accomplish incalculable good, and
when you hear complaints about the Government's unreasonable interference with business, think of the deceased
English slogan "Business as usual." Co-operate with us in
the business in which we are all in partnership, the business
of humanity, the business of democracy, the business of
Victory, and be assured that success in a business of such
overwhelming magnitude cannot be attained without money,
without materials, and without labor, but above all, without
unselfish, unstinted, unquestioning sacrifice.




ADDRESS OP

DR. J. T. HOLDSWORTH
Dean of the School of Economics.
University of Pittsburgh.

This district has gone over the top again in the Third
Liberty Loan, as also it undoubtedly will in the W. S. S. drive
ending today. Every new financial demand yields fresh evidence of the patriotism of our people, and of their capacity
and willingness to give outright or as a loan, even to the
point of sacrifice, when the country's need requires it. In
all these financial campaigns the banker has played an unselfish and honorable part; he has not shirked the heavy
burden of expense, personal effort and responsibility laid
upon him. But even as our boys in khaki yonder at the front
are steadily, and with enthusiasm, occupying a larger part
of the line between military autocracy and world democracy,
between hellish Rightfulness and freedom, so must the
banker, with the same high morale that now animates this
nation as a whole and the millions of our lads over there or
soon to be in arms, be nerved and prepared to assume a
steadily increasing proportion of the financial line, without
the full and timely support of which the fighting line would
be powerless.
Tentative announcement has been made of the forthcoming Fourth Liberty Loan for at least six billion dollars
to be offered in the fall. To anticipate this huge draft upon
the nation's fund of savings, to distribute the burden over a
longer period, and to ensure the success of the Loan, the
Treasury Department has called upon the banks of the country to subscribe to $750,000,000 of United States certificates
of indebtedness every two weeks for a period of 16 weeks
beginning June 25. Each bank is expected to take an
amount equal to about 2^ per cent of its gross resources
each fortnight, or a total of five per cent a month. The
certificates are payable October 24 and bear interest at the
rate of 4 | per cent. The allotment of certificates for this



Federal Reserve District is about $68,000,000 each two
weeks, of which Allegheny County's share is $24,000,000.
With total banking resources in excess of a thousand million
dollars in the county there should be no difficulty in
carrying more than our share as we always expect to do.
Of the 1900 banks, approximately, in the Fourth Reserve
District, however, only about 700 got into the first fortnightly allotment. Surely no bank in Allegheny County will
be behind in the allotments to follow.
Quite aside from the patriotic duty and responsibility laid upon the banks in this matter, it may be said that
as a measure of self interest alone it pays. The director of
sales in this District calculates the rate of return on the
average investment, on a basis that Government deposits
on account of the proceeds of Liberty Loans and these Certificates of Indebtedness remain in the banks an average of
six weeks, as follows: On the six weeks deposit withdrawal
basis, the bank will have a continuing average Government
deposit during the sixteen weeks of 133-1/3% of its biweekly purchase of Treasury Certificates and 120% on a
five weeks basis. As the Government deposit decreases the
amount of the bank's funds invested in the certificates, the
net return on the average investment on the six weeks
withdrawal basis is 5.55 % per annum and on the five weeks
basis 5.41%.
There is no question as to the superiority of our
material resources, nor of our willingness and ability to
fight and to make all needful sacrifices in this great struggle
which solemnly we have sworn to wage to a victorious finish.
Our boys, the best fighters in the world, are now going over
in a steady and ever widening stream, and they are being
supported by most gratifying increases in the supply of
ships, aeroplanes, munitions, and other war supplies. We
have promise of magnificent crops and these will be conserved and economically distributed. Here in this region,
the most important source and center of basic fighting materials in the whole country, we are about to mobilize our
entire industrial output to eliminate waste, duplication, and



unnecessary expenditure of capital, labor and raw materials
in non-essentials. Mr. Wills has explained the necessity for
and the methods employed in conserving investment capital
through the Capital Issues Committee.
And now comes again the call to the banker, who is
at once the custodian of credit and the business adviser in
private industry, to continue his leadership in the new
financial drive. The conservation and effective utilization
of credit is just as essential in winning this war as food or
ships, or the production of guns and munitions,—and this
in large measure is within the control of the banks. You
men here are all commissioned officers charged with the
financial leadership of companies, battalions, or divisions in
the fighting force behind the line. When our Pershing said
to the French commander: "All that we have is yours" he
spoke not alone for himself and the gallant soldiers under
his command, but for every American and for everything
that America has. Remember the President's words: "It is
not an army that we must shape and train for war; it is a
nation."
There may be a solitary banker here or there who
still believes that we can conduct "business as usual" and
carry the war as an "extra." But the banker who thinks
first of dividends to stockholders or of the demands of the
borrower who would carry on business as usual, irrespective
of whether the Government has sufficient funds to command
the materials, the capital and the labor necessary to meet
all its legitimate war needs, has yet to receive his baptism
of patriotism. Shall any one say: "I have given to every war
fund; I have contributed to every Liberty Loan; I have done
all I can." Why, men, we have only begun to fight. After
their glorious victories at Chateau, Thierry and Belleau
Woods our boys did not say: "We've smashed the Kaiser
once, now let us go home and rest on our laurels." Not they;
these boys will not quit until they have smashed the Hun
all the way back to Berlin. None of us here at home, far removed from the mud and the blood, shall say: "I have done
all I can" until he has done better than his best. While



civilization and liberty watch, breathless, for the coming
of the weight of American reinforcements, let us who cannot go keep the coffers of the Treasury full so that they may
have everything with which to fight victoriously. This now
is the task of and the challenge to the banker.







Cramer Print, Crafton


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102