cial paper at the Federal Reserve bank of the district in which the borrowing institution is located. Against the loans so made the War Finance Corporation may issue and have outstanding at any one time its notes or obligations in an amount not more than eight times its paid-up capital. These obligations shall run not less than one year or more than five years, and shall bear interest at a rate to be fixed by the Board of Directors. They are to be a paramount floating charge on all assets of the Corporation and are to be issuable at par in payment for any advances made or sold publicly, as the Board of Directors of the War Finance Corporation may determine. They may also be dealt in by the Federal Reserve banks under the conditions that apply to the bonds of the United States Government that are without the circulation privilege, and paper secured by them shall be eligible for rediscount at the Federal Reserve banks. Against the obligations of the War Finance Corporation, whether acquired by purchase or rediscount, the Federal Reserve banks may issue Federal Reserve notes, subject to a special interest charge or tax to be imposed at the discretion of the Federal Reserve Board-the intention being, presumably, that the Federal Reserve Board shall be empowered to restrain the tendency toward inflation that might otherwise be implicit in the measure. 66 The directors of the War Finance Corporation are also empowered to license the issuance of new securities, and no issue having a par value of over $100,000 is to be made without their approval. This latter provision is not, however, to apply to loans made in the ordinary course of business as distinguished from borrowing for capital purposes, or to any securities issued by railway corporations whose property may be in the possession and control of the Government. The obligations of the War Finance Corporation are to be exempt from all Federal and State taxes, except inheritance taxes, income surtaxes, and excess profits and war profits taxes now or hereafter imposed. From this brief analysis it will be seen that the War Finance Corporation will, if it comes into existence, possess the machinery through which the Federal Reserve note circulation may be increased by a maximum of four billion dollars, thus providing a credit fund of that amount that will be at the disposal of those who own or have made advances against the bonds or obligations of "persons, firms, or corporations whose operations shall be necessary or contributory to the prosecution of the Obviously there is room for great latitude in determining what operations are "necessary or contributory to the prosecu tion of the war," but it is plain that a reasonably broad construction of this clause will put at the disposal of the security markets a credit fund of some four and a half billion dollars, as the War Finance Corporation is authorized to lend its capital of $500,000,000, plus $4,000,000,000 (e.g., eight times its capital), to be obtained by the issuance of obligations that will rank with Government bonds and may be used to secure Federal Reserve note circulation. This fund of $4,500,000,000 may be loaned through banks, bankers, and trust companies directly or indirectly on the bonds and obligations of individuals, firms, and corporations that are engaged in operations that are necessary or contribu tory to the prosecution of the war. These loans may run for not more than five years, and when secured by the deposit of collateral owned by the borrower may not be for more than seventyfive per cent of the market value; but when bankers rehypothecate the obligations of other borrowers one hundred per cent of the face value of the rehypothecated obligations may be loaned at the discretion of the directors of the War Finance Corporation. It is also to be noted that, while the bill apparently provides that all loans shall be secured by "obligations or bonds," thus excluding stocks from the securities that are acceptable as collateral, it would seem to permit the use of stocks as margin to the extent of twenty-five per cent of the amount loaned. This is made clear by a clause which permits loans up to one hundred per cent of the market value of the bonds or other obligations hypothecated, provided such advances are additionally secured by "collateral security" (which is not otherwise described) having a market value equal to at least twenty-five per cent of the amount advanced. Assuming that the Corporation shall exercise its maximum. powers, the market value of the securities financed would be $5,625,000,000, computed as follows: The loans made may be for five years, which brings them nearly within the category of what is described as " permanent financing;" and, while it is not to be assumed that a very large proportion of the accommodation extended will run for so long a period, this five-year provision is to be specially noted as affording a means for successfully bridging any depression in the security markets that may follow peace. The whole plan is one that its opponents will probably describe as a radical departure in finance. It is being widely discussed already, and at least one prominent authority has hastened to criticise it as "inflationary." As no two of those who use this term would probably agree upon a definition of inflation, I shall not attempt to answer their criticisms. My own theory is that there can be no inflation as long as the gold standard is maintained (except as it may come through a depreciation in the purchasing power of gold), and that any increase in the supply of credit based upon real values, as measured in terms of gold, is desirable in that it develops the latent energies of capital hitherto dormant. This is, however, a complex question concerning which there is room for endless debate, and I shall not attempt to discuss it; my main purpose in drawing attention to the proposed War Finance Corporation being to point out the results that will probably follow its operations if it is brought into being. It will provide the means by which, under the guarantee of the United States Government, some $4,500,000,000 may be loaned upon bonds and other corporate obligations for a period of five years or less. It is a maxim of finance that an assurance of credit makes for stability in values. The knowledge that capital can be borrowed by those who need it tends to promote confidence and release what may be described as the hoarded credit that is withheld by the timid in times of stress. The effect is to stimulate enterprise and energize hope and ambition in constructive activity. I believe that the creation of the War Finance Corporation will accomplish this result, and I am therefore in favor of it as providing a method by which the industrial operations that are essential to the prosecution of the war may be quickened, and the marketable value of the securities which represent such a large share of our accumulated wealth may be maintained upon a parity with their intrinsic value. If the War Bank becomes a fact, the unnecessary depreciation that has recently occurred in the value of many securities that are indubitably sound is likely to be promptly recovered, and men of ability will be encouraged to devote themselves wholeheartedly to the business of war because they will know that the capital required can be obtained when it is needed. 258 WEEKLY OUTLINE STUDY OF CURRENT HISTORY BY J. MADISON GATHANY, A.M. HOPE STREET HIGH SCHOOL, PROVIDENCE, R. I. Based on The Outlook of February 6, 1918 Each week an Outline Study of Current History based on the preceding number of The Outlook will be printed for the benefit of current events classes, debating clubs, teachers of history and of English, and the like, and for use in the home and by such individual readers as may desire suggestions in the serious study of current history.-THE EDITORS. [Those who are using the weekly outline should not attempt to cover the whole of an outline in any one lesson or study. Assign for one lesson selected questions, one or two propositions for discussion, and only such words as are found in the material assigned. Or distribute selected questions among different members of the class or group and have them report their findings to all when assembled. Then have all discuss the questions together.] I-INTERNATIONAL AFFAIRS Topic: Austria Can't; Germany Won't. 1. Discuss Germany's dealings with Austria. What advice would you give Austria? Think carefully. 2. What sort of faith has Germany shown toward Russia since the two began their peace maneuvers? 3. How has Germany treated President Wilson's outline of war aims? 4. From Germany's attitude toward and treatment of these three nations (Austria, Russia, and America), could you place confidence in any agreement Germany might make in respect to a just and enduring peace? 5. Do you believe this war must continue until Germany is physically at the mercy of her enemies? Give reasons. 6. Had you the power, just what changes would you bring about in Germany? For what rea sons? II-NATIONAL AFFAIRS A. Topic: The President, the Congress, the Country; The War Department; The War Machine; Staking American Lives on a Machine Gun; A Plea for a War Cabinet; Shall We Have a Coalition Cabinet? Reference: Editorials, pages 204-206; 207 212. Questions: Note-Read the last set of references (pages 207-212) first. 1. What are the leading facts Senator Chamberlain set forth before the Senate? 2. Give a summary of the Surgeon-General's testimony. 3. How do you account for Secretary Baker's changed manner in addressing the Senate Committee? 4. How successfully do you think he defended his Department? Why? 5. Do you think the War Department is organized on a sound basis? Tell why or why not. 6. For what reasons does Dr. Odell ask the question (page 209), "Is there not something radically and profoundly wrong in the situation?" Does he answer his own question? How do you answer it? 7. What alleged reasons does the American journalist (page 210) give for our not having done more to help our allies? 8. How does he account for it? 9. According to this writer, of what value would a War Cabinet be? 10. What objections does he say are made against the formation of a War Cabinet? How does he meet these objections? 11. For what reasons would you advise Americans to read Mr. Bridges's article on a coalition Cabinet? Is the lesson as plain as Mr. Bridges thinks? 12. What does The Outlook say about (1) Senator Chamberlain, (2) Surgeon-General Gorgas, (3) Mr. Hoover, (4) Mr. McAdoo, and (5) Mr. 66 1. Whence the name Quaker"? 2. III-PROPOSITIONS FOR DISCUSSION 1. At the present time it is every man's IV-VOCABULARY BUILDING (All of the following words and expressions are found in The Outlook for February 6, 1918. Both before and after looking them up in the dictionary or elsewhere, give their meaning in your own words. The figures in parentheses refer to pages on which the words may be found.) Diversely, subtleties, apropos, cryptic, federal state (199); irreparably, function, deprecate, fetish, routine, captious, percussion (205), Ordnance Department, orderlies (207), attitude, aims, reform (208), per cent (209), autocrat, affront, incorporate, exigency, alternative, colleagues (211); ethics, tenet, cómmunity, civilized world, Tolstoy, Christian, exegesis (218). A booklet suggesting methods of using the Weekly Outline of Current History will be sent on application TRADE YALE Look into the economy of Yale products Consider Yale products on any basis The economy of first cost; the economy of satisfactory service long continued; the economy of quality. You get longest service out of Yale products-you get highest quality in Yale products-at every price. You buy the best that experience and knowledge and skill can produce when the product bears the trade-mark "Yale." Yale products are leaders in their line the accepted standards -and each one bears the trademark "Yale" "How I Save 51% on Typewriters" An Expert Buyer's Statement "Formerly the typewriters used in our office were priced at $100 each. Was OLIVER Typewriters Now $100 T Over 600,000 Sold $49 HE Oliver Typewriter Company now sells direct. It has discarded old and wasteful ways. Formerly we had 15,000 salesmen and agents. We maintained expensive offices in 50 cities. 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Then mail it today for either a free trial Oliver, or our amazing book entitled "The High Cost of Typewriters The Reason and the Remedy." With the latter we send an illustrated catalog describing the Oliver in detail. Which for you? Check one or the other item on the coupon now. Canadian Price $62.65 PIEDMONT COLLEGE DEMOREST, GA. Appeals to the Christian and Patriotic People of America for Help in this Time of Stress WHY? 1. Because this College is an Asset of Great National Value 1. It is ideally located: In the great Piedmont section, on the edge of the Blue Ridge mountains, in a region of entrancing beauty, in one of the two most healthful counties of the United States, in the geographical center of the Southeast, on the greatest railway system of the South. 2. It has a special field of incomparable needs and possibilities: While its doors open to all classes, its special field is the descendants of the non-slaveholding families of slavery days-the Scotch-Irish of the Southern mountains and the pure Anglo-Saxons of the Southern lowlands. Four-fifths of the white people of the South never had a slave, while slavery robbed them of every industrial and social opportunity. From this stock came the greatest of all Americans. Abraham Lincoln's mother was from the mountains, his father from the lowlands. He was born and had his childhood in a cabin poorer than the average mountain cabin. Piedmont College has for its field the millions of these kinsfolk of Lincoln. They are a sturdy, loyal race. A New England minister visiting one of their schools wrote, "The number of six-footers here is unreasonable." In one mountain county so many enlisted for the present war that no draft was made in the county. In one lowland county one hundred and fifty-two were drafted, all passed the physical examination, and not one asked for exemption. Yet in the State in which this county is located thirty thousand drafted men signed with a cross because they could not write their names. We have no blood in America of better natural endowment. What an asset to develop for our Country! 3. It has an unusual record: Chartered September 7th, 1897, in twenty years its influence has transformed the mountain region about it. It has sent hundreds of teachers into the mountains and lowlands of the South, and hundreds of workers into other walks of life-ministers, lawyers, farmers, endowed with ideals and trained for service. It has developed and donated to the town in which it is located a self-supporting public school system, promoted a sewer system and water-works for the town, is introducing better farming methods, truck gardening, new breeds of cattle and hogs, is developing fruit culture and leading the way in many things in the practical life of the people. 4. It has a good beginning in equipment: It has four hundred acres of land, uses twenty buildings of various kinds, has the beginnings of ten industries, has about $300,000 worth of property, including a little over $100,000 of endowment funds. It has forty-eight teachers and workers, and although many of its students are in the army and navy, it opened this year with crowded buildings—young men and women in about equal numbers. 5. It is training coming leaders for the South and the Nation: It has students from thirteen States, and from this great field it is bringing new, fresh, and vigorous forces into our national life. It is disseminating ideals which rapidly germinate into valuable material, intellectual and spiritual assets. 6. It is thoroughly Christian: It exerts no pressure, uses no fervent evangelistic methods, yet so earnest are the students who come from these awakening people, so practical, wholesome and Christian is the spirit of the institution, that every member of its twenty graduating classes has taken a Christian stand and every graduate, with perhaps one exception, is "making good" in the world today. II. Because War Conditions have Cut Off a Large Part of its Regular Donations 1. Its Budget calls for $50,000 in donations in addition to stated income to cover regular expenses and necessary extras. 2. It has cost life-blood to secure what has been secured (something over $20,000) and the work grows more difficult every day. 3. $10,000 is imperatively needed immediately and $20,000 more before the end of its fiscal year, June 30th. It will be a calamity to have this institution, with such a field, such a record, and such need of its work, disastrously crippled, as it surely will be unless assistance is quickly given. Donations of any size will be gladly welcomed and promptly acknowledged. Make checks payable to Piedmont College, and mail to the Treasurer, George C. Burrage, Box 174, Demorest, Ga., or for this month and next to Pres. Frank E. Jenkins, Room 85, 289 Fourth Ave., New York City. Do Not Fail this Christian College in its Hour of Distress in the Year When it is Doing its Most Successful Work in Helping Make Democracy Safe This advertisement was made possible by a special donation from a friend of Piedmont. "You can really have no notion how suc- When you give 'em ships and food and The things we could, or would, which Would not, could not, would not, could not, "We're doing everything we can. Recall, But the People shook their heads and said, you, Will won't will Will you, won't you, will you, won't you, SACRIFICE THE ORDER OF BY LIEUTENANT-COMMANDER HENRY VAN Former United States Minister to the Netherlands When the first Liberty Loan came out, subscribed as much as I could. I When the second Liberty Loan came out, I found that I could subscribe something more to that. Now I am getting ready to subscribe something more to the third Liberty Loan when it appears. Why should any American be surprised or grieved at being called upon for selfdenial in these perilous and glorious times? We cannot win this war with a couple of million soldiers and sailors and ninetyeight million slackers. Everybody, from the youngest to the oldest, from the richest to the poorest, must lend a hand. Sacrifice is the order of the day. Our life in this country for the past halfcentury has been too easy, too prosperous, too comfortable, too free from care. It has tended to a false self-complacency and a silly sense of immunity from all dangers-as if all the liberties and privileges which we enjoy were ours by a divine right and could never be threatened or taken away from us. Such a state of feeling tends to fatty degeneration of the heart, mind, and con science. Now this war has come to shake us out of that dangerous condition and to teach us that we must all be ready to defend the things which we value most if we wish to keep them. It is a hard experience for all of us, and for some it will be a sharp and Sacrifice the Order of the Day (Continued) bitter trial. But nothing is worth having which is not worth making a sacrifice for. Those who do not take a part in that sacrifice now, either by personal service or by the consecration of their resources, are not worthy of the name of American. The happiest and most enviable are those who can do both. The argument for the Liberty Loan as one of the absolutely indispensable munitions of our country in this war is too plain to need statement. The argument for the Liberty Loan as the safest and surest investment in the world to-day ought to have weight with that prudence which is not altogether an unworthy part of patriotism. But I should not stress this argument too strongly. For, after all, it is not self-preservation that we must think of first. It is the preservation of the life and honor of our country. My little daughter, twelve years old, was the first in our family to subscribe to the first Liberty Loan. She said to me one day in October: "Father, I have done something without asking your permission, but I hope you will not be displeased." "What is it?" I asked her. "Well," she said, "I took my money out of the savings bank and bought a hundred-dollar Liberty bond." Was I displeased? I guess not! BAPTISTS, IMMERSION, AND THE RIGHT OF PRIVATE JUDGMENT The editorial in The Outlook for December 19 on "Mr. Rockefeller's Contribution to Christian Union" opens up a question that needs a full and free discussion. The Outlook rightly says that "what distinguishes the Baptist churches is their spirit of individual liberty." Putting it into the old formula, it is "the right of private judgment." We Baptists have boasted of this principle for ages. The one and only great step we need to take to-day is to be consistent in its application in our churches. For example, no Baptist church that I have ever known thinks of making belief in missions an indispensable prerequisite to church membership that question is left to the individual's own judgment; and yet what sane man would ever put the two things, immersion and the missionary spirit, on the same level? The missionary spirit in our churches is infinitely more important than any form of baptism can ever be. If we leave the greater thing to the individual's own spirit and judgment and refuse (as we do) to let him exercise that same judgment on the lesser thing, are we not in danger of being classed with those of olden days who "strained at a gnat but swallowed a camel"? Does not this action put us with those who tithe "mint and anise and cummin, and have left undone the weightier matters of the law"? The right of private judgment" has practically won out in the matter of the communion; and many Baptist churches have already taken the same stand with regard to immersion. The best basis for church membership is that given in Acts x: "I perceive that God is no respecter of persons: but in every nation he that feareth [reverences] him, and worketh righteousness [does right], is acceptable to him." And all such ought to be acceptable as church members. GEORGE DONO BROOKES, You Could Live Were All Foods Like Quaker Oats In Quaker Oats, 1000 calories of nutrition cost 5 cents. In the larger package a little less. So the average daily need--2500 calorieswould cost 12 cents in this food. Of course, one likes mixed diet. But what we urge in these days is-mix in what oats you can. Every dollar's worth used in place of meat saves an average of $7. Every pound used in place of flour means more bread for our allies. The oat is Nature's supreme food. No other grain can match it in flavor and nutrition. Oats are plentiful and cheap. You can serve five dishes of Quaker Oats for the cost of a single egg. |