TWENTY-FIRST ANNUAL YEAR BOOK— PART VII 587 



With the signing of the armistice in November, 1918, the loans made 

 by the War Finance Corporation were repaid. In March, 1919, Congress 

 revived the corporation's activities by empowering it to lend not to 

 exceed $100,000,000 at any one time, to aid American exporters or Ameri- 

 can bankers who had financed American exports. In May of this year 

 the Secretary of the Treasury suspended its operations on the technical 

 ground that its time for existence, as specified in the Act of Congress 

 creating it, had expired. 



Congress is right now considering a bill to revive the foreign trade 

 financing activities of the corporation. The administration, as voiced by 

 Secretary of the Treasury, Mr. Houston, is opposed to its revival on the 

 ground that it will be an instrument of further inflation of credits in 

 the banking system, and maintains that the government should be get- 

 ting further out of the banking business instead of going in again. How- 

 ever, the War Finance Corporation is a going concern, with its funds still 

 intact, and is therefore a workable piece of temporary machinery, oiled 

 and ready to function. And if the further sale of bonds of the corpora- 

 tion is made to the investing public (and by this I mean investors such 

 as are in the habit of making long-time permanent investments in land, 

 mortgages or long-time bonds), and if said bonds are not sold to the 

 banks, then its operation will be sound economically. We may hope for 

 an early betterment of conditions within a few months after Congress 

 acts. 



But keep in mind, please, that the revival of the War Finance Corpo- 

 ration will be a temporary expedient, in order to get the wheels turn- 

 ing, and that the real permanent economic relief will come from the suc- 

 cessful launching of Edge law corporations. 



Banks to Encourage Exports^ 



Early in November the bankers of the South met in New Orleans and 

 formed a corporation under the Edge Law with a capital of $30,000,000. 

 The capital has all been subscribed by the banks, each bank taking an 

 amount equal to 3 per cent of its capital. This corporation will function 

 largely in financing the exportation of cotton. 



On December 11th there was set in process of organization under 

 the provisions of the Edge Act a corporation with a capital of $100,000,000 

 to be known as The Foreign Trade Finance Corporation. 



This organization is being sponsored by the American Bankers' Asso- 

 ciation, and it is noteworthy that on the committee on permanent organi- 

 zation made up of thirty men, three members hail from Iowa. 



Resolutions adopted by the conference set down to guiding principles: 



"Extension of credit by the corporation should be confined to coun- 

 tries where there is a stable government, and where there is an assur- 

 ance of integrity of purpose. 



"Operations of the corporation should be confined to financing for 

 the benefit of future foreign trade." 



The latter principle emanated from the agricultural interests. Its 

 purpose was to prevent the unloading of some of the "fioating debt" of 

 $3,500,000,000 to $4,000,0000,000 owed America by Europe upon the new 

 company. In other words, new foreign business, instead of liquidation of 



