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 for War 
 
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 Guaranty Trust Company 
 of New York 
 
Mobilizing Money 
 for War 
 
 1917 
 
 ^vij|-r* t/ Guaranty Trust Company of New York 
 
 140 Broadway 
 
 Fifth Avenue Office : Fifth Avenue and 43d Street 
 
 London Office : 32 Lombard Street, E. C. 
 
 Paris Office: Rue des Italiens 1 & 3 
 

 COPYRIGHT, 1917 
 BY GUARANTY TRUST COMPANY OF NEW YORK 
 
Mobilizing Money 
 for War 
 
 /^UR Government needs funds for war. 
 ^-^Part of this money will be raised by 
 taxation, and part by a great popular loan 
 to which the public will be given every oppor- 
 tunity to subscribe. The United States is 
 today the richest country in the world. The 
 demands of the war are imperative. The 
 nation's wealth must meet the nation's needs. 
 
 The American people are not yet educated 
 to the purchase of bonds as are the people of 
 other countries. Less than one-fifth of one 
 per cent, of the people of the United States 
 own bonds, and only a fraction of these are 
 holders of Government securities. In both 
 France and England, more than eleven per 
 cent, of the people have helped individually 
 [3] 
 
 360182 
 
to finance those countries in performing their 
 part in the present war. 
 
 The Government has a sound basis for its 
 belief in the patriotism of the bankers and the 
 investors of the country, and for its anticipa- 
 tion that they will give their enthusiastic co- 
 operation in the support of this loan. In 
 order to assure its success, however, this co- 
 operation must be broad and deep. It must 
 extend far beyond ordinary channels of in- 
 vestment. Thousands of persons who never 
 have purchased bonds, who never have been 
 in touch with financial houses, must become 
 investors in this issue. It has an appeal not 
 only to patriotism, but to reason and to busi- 
 ness sense. The whole nation must be 
 quickened to a complete understanding of 
 the spirit and the meaning of this invest- 
 ment. America must enlist its wealth as well 
 as its manhood. 
 
 [4] 
 
The following is an outline of the hill now 
 before Congress^ recommended by the Secre- 
 tary of the Treasury 9 William 0. McAdoo: 
 
 The Secretary of the Treasury is authorized 
 to borrow on the credit of the United States 
 in order to meet expenditures for the National 
 defense, $7,000,000,000, in addition to certain 
 sums heretofore authorized by Congress. 
 Under regulations prescribed by the Secre- 
 tary of the Treasury, bonds not in excess of 
 $5,000,000,000, and one-year notes not in 
 excess of $2,000,000,000, will be issued, the 
 rate of interest not to exceed three and one- 
 half per cent. If any subsequent series of 
 bonds is issued prior to December 31, 1918, 
 at a rate of interest higher than that of the 
 bonds issued under this law, this series may 
 be converted by the Secretary of the Treas- 
 ury into bonds bearing the higher rate of 
 interest. 
 
 Under regulations prescribed by the Secre- 
 tary of the Treasury, bonds will be placed on 
 
 [5] 
 
the market for popular subscription at par, 
 and any bonds not subscribed for will be 
 otherwise disposed of by the Secretary of the 
 Treasury. No commissions will be paid in 
 making disposition of the bonds. Bonds 
 will be exempt, both as to principal and inter- 
 est, from Federal and State taxation, except 
 estate and inheritance taxes. Bonds and 
 notes, however, will not bear the circulation 
 privilege. 
 
 For the purpose of establishing credit in 
 the United States for foreign governments, 
 the Secretary of the Treasury is authorized 
 to purchase from foreign governments, at par, 
 from the proceeds of bonds issued under this 
 law, obligations not exceeding $3,000,000,000, 
 bearing the same rate of interest and con- 
 taining essentially the same terms and con- 
 ditions as those issued by the United States. 
 If United States bonds are subsequently 
 converted into bonds bearing a higher rate 
 of interest, as provided above, the foreign 
 government bonds purchased by the United 
 States, shall be converted into bonds bearing 
 [6] 
 
the increased rate of interest of the United 
 States bonds so converted. Foreign govern- 
 ments may pay oflP before maturity, or the 
 Government may sell, at not less than the 
 purchase price, bonds purchased by the United 
 States, and the funds so realized will be used 
 to redeem or purchase outstanding interest- 
 bearing obligations of the United States. 
 
 The wealth of America is increasing be- 
 yond all precedent or parallel. In the last 
 seven years, our national income has in- 
 creased almost 33% per cent.; in the last 
 seventeen years, it has grown nearly 117 per 
 cent. 
 
 Our foreign trade for the calendar year 
 1916 reached the enormous sum of nearly 
 eight billion dollars. This surpasses the com- 
 bined totals of 1911 and 1912, and is more 
 than two and one-half billions greater than 
 the returns for 1915. In the trade figures 
 [7] 
 
of nations, there are no records comparable 
 to these. 
 
 America has prospered greatly since August 
 1, 1914. In the thirty-one months that have 
 elapsed since then, our foreign trade balance 
 has attained the huge total of five and three- 
 quarter billion dollars. This amount of 
 money is almost six times the national debt 
 of the United States as of April 1, 1917. 
 
 The Government's outstanding interest- 
 bearing public debt on the above date was 
 less than one billion dollars principaly — only 
 one-fortieth of the nation's present annual 
 income. 
 
 This nation possesses one-third of the 
 world's stock of gold — nearly three billion 
 dollars. 
 
 The national assets of the United States 
 equal the combined wealth of Great Britain, 
 Russia, France, and Italy. America today 
 has two and a quarter times as much wealth 
 as Great Britain; four times as much as 
 [8] 
 
France and eight times as much as Italy. 
 It is the richest nation in all history. 
 
 Great Britain has borrowed a little more 
 than one-fourth of the amount of her na- 
 tional wealth; the borrowings of France and 
 Russia are less than one-fifth, and Italy's 
 proportion is but a little more than one- tenth. 
 Judging from these figures, the borrowing ca- 
 pacity of the United States, with its two hun- 
 dred billions of wealth, should be more than 
 forty billions. It is inconceivable that such 
 a sum will be necessary, but whatever amount 
 our national honor demands, should be raised 
 by the contributions of the whole nation and 
 from the resources of all the people. 
 
 While the banking institutions of the 
 United States may be confidently relied upon 
 to take up their full share of this loan, it must 
 be remembered that it would not be for the 
 best interests of the country to have them 
 assume more than their proper amount of 
 the burden. These institutions are relied 
 upon by our great manufacturing and trade 
 
 [9] 
 
enterprises, whose activities will probably 
 be increased by our entrance into war, to 
 provide them with credit with which to carry 
 on their commercial activities. Any reduc- 
 tion of such credits, necessitated by too large 
 a participation in the government loan, would 
 be a blow to the country's industries. It is 
 evident, therefore, that the bulk of the loan 
 should be taken by the public at large, and 
 not by the bankers. 
 
 The Secretary of the Treasury has an- 
 nounced that it is the purpose of his Depart- 
 ment, in effecting the distribution of the 
 bonds, to seek the assistance of Federal Re- 
 serve banks, national banks, state banks, 
 trust companies, savings banks, insurance 
 companies, private bankers, and investment 
 bankers throughout the country. In addition, 
 every governmental agency, such as Internal 
 Revenue oflSces and post offices, will be asked 
 to assist in distributing the bonds. That this 
 work, in itself, will be of incalculable service 
 to the nation is evident from the fact that 
 the laws of the United States forbid the 
 [10] 
 
payment of commissions on sales of Gov- 
 ernment bonds. Bankers and distributing 
 agents, therefore, will give their services to 
 the Government, not only without profit to 
 themselves, but entirely free of charge. 
 
 The duty of seeing that these loans are 
 bought — and bought speedily — thus devolves 
 upon the public, upon the average citizen. 
 
 Not often have our citizens been given a 
 chance to show their confidence in the Gov- 
 ernment by lending their money. When 
 they were asked to do so during the Civil 
 and Spanish-American wars, their action was 
 prompt and generous. 
 
 The history of the United States proves 
 abundantly that our people do not hesitate 
 when the life, the integrity, or the dignity 
 of the nation is at stake. The historic 
 $500,000,000-bond issue of 1862 is a conspic- 
 uous example of the readiness of our citizens 
 to support their Government. It was pur- 
 chased directly by the people, at par, in 
 
 [11] 
 
currency. During the war with Spain, the 
 mobihzation of money was accomplished with 
 astonishing rapidity A Government bond 
 issue for $200,000,000 at three per cent, was 
 offered at par and was nearly eight times 
 over-subscribed. So popular was this loan 
 that it went to a premium of six per cent, 
 within three months, and rose, in the follow- 
 ing year, to 110%. Yet there were only 
 320,000 subscribers to this loan. 
 
 Although our country is rich and our 
 financial institutions strong, it is the people 
 who must subscribe to this great loan if it 
 is to be successful. 
 
 This war is the concern of every citi- 
 zen of the United States. 
 
 Each must do his share. 
 
 Patriotism means both Loyalty and 
 Sacrifice. 
 
 [12] 
 
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 UNIVERSITY OF CAUFORNIA UBRARY