New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-12
HILL DEGREES INFLATED
TRUST CAPITALIZATION
Honest Financing. Economy and
Decrease OF Public Indebted
ness Needed. He Says.
PUBLIC SPENDS WILDLY
Handing Burdens Down to
Posterity the Meanest Form
of Stealing, Asserts
Railroad Leader.

+ ST PaUl Feb. 1.-THE modern industrial
community in It's widest as well as in its
paIrcWeSt scope rests on credit, accord
/ ing 70 James J. Hill. principal speaker to-
night at the eighteenth annual dinner OF
, the st. Paul Association OF Credit Men.
Nh Hills address Was OF The Use and
: Abuse Of Credit"
Excessive capitalization Of trusts ana
some less spectacular enterprises and the
/ increase Of public Indebtedness every
/ where We're given by him az TIE principal
| abuses Of credit at the present time. Nj.
! lin added:
/ The invention of mone; was .OnS step
! toward civilization. but the Invention or
credit Uae greater one. The world
deals even more largely NTH credit. II is
! the motive power Of current enterprise.
outside Of small retail transactions and
| the settlement of balances actual cash IS
| little used. Instruments OF credits. ID the
manifold forms created by business Tor
its convenience. carry from % 10 ~ per
: cent II all business transactions
3 Contract or expand credit unduly or
improper l.; and the effects may BE- incom-
pdrabiy worse than those OF the widest
! experiments In currency tnkrring That
| the world has ever seen. No cause has
! has been more prolific Of misfortune.
! The commonest form of the abuse If
credit tNFn e
Of cheap money. Possibly the world has
/ Crowd too wise To fall again into the IRA y
1 OF this dclusion. But ii Is doing or per
! hitting practically In" same thing ia
| other forms The excessive capitalization
! OF trusts and Of some less spectacular en-
I toiprises has much the same effect ~ an
issue Of cheap mOrcN.
! Stocks and bonds are put out which rep
! resent little on nothing IN the shape 90
/ actual values. So long as We have no
/ effective laws compelling al stocks and
! bonds to he paid for at their iuli face
/ value either in cash. property or ser
: vices at . fair valuation, SO Ions viii this
/ evil continue.
/ Neither do the performance Of conbi-
nations. syndicates and corpora lions or
| gained to sell bits Of Autographed paper
tell the whole story. The same effect Is
! produced By the increase OF public in
| debetdness everywhere. The issue Of a
! state. city OF county bond affects credit
, volume more powerfully and produces
Z more directly all the effects OF an IL
B crease in money volume. because il is
acceptable as collateral for nearly or
/ quite its face value in credit issues.
The whole American public is Wild
/ With spending. Public economy is lost
art. \ bill that carries OF requires an
! appropriation needs little else 20 com
! mend it To any legislative body. All
| bonds OF municipalities are now refund
! ed instead Of being paid when due. The
1 excuse for q bond issue is always thaf
cost Of public Improvements.
But when we. as posterity. come along.
We not only repudate the contract but
add new burdens to the old and shove
/ both Of them on TO the future. in the
| shape OF new and refunding bond issues.
1T is. perhaps. the meanest form OF
! stealing ever invented. because il adds TO
| the criminality Of breach OF trust the
/ baseucss Of embeZzlne the future re-
( sources Of our own children, who. since
! there must come an md OF borrowing
! some time will have these debts to pay
/ asserted Mr. Hill.
THE same fight so often made against
currency imitation must be repeated
against the imitation and depreciation Of
credit. to which excessive expenditure and
unwarranted borrowing inevitably lead. -