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War Finance Corporation

an organization established in 1918 for the purpose of supporting banking and industrial credit during the war. The plan was advocated before the Senate Finance Committee in February of that year by Secretary of the Treasury Mc- Adoo, and after it had been considered in Congress the bill received the approval of the President. It provided for a corporation with $500,000,000 capital, subscribed by the Government, and authortance taxes, and graduated additional income taxes, known as surtaxes, and excess profits and war profits taxes. The proceeds from the sale of the bonds were used for the general purposes of the corporation. Considerable amounts were taken up by advances to the railroads and other sums were docketed as likely to be necessary in the financing of commerce abroad. To this bond issue there were a large proportion of subscribers who bought in small amounts and as a result large blocks of securities remained in the banks. Later the corporation was stated to be buying back its own bonds, and notices were given out that it would redeem any of its bonds at 99.15.66. One of the functions committed to the War Finance Corporation was the duty of investigating and determining whether issues of securities by private concerns were compatible with the national interest, the Capital Issues Committee being created to attend to this work. The primary object of this committee was to see that no money which might be valuable in the prosecution of the war might be expended in unnecessary directions. In reply to inquiries in the Senate in October, 1918, as to the corporation it was stated that it had 28 people in its employ, the compensation to them amounted to $6,229.83 per month, expenses being paid out of earnings.