Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1913-06-16
DANCER SEEN IN
S500,000,000
NOTE ISSUE
Forbes Says McAdoO's Readiness
to Give Out Paper Is Invitation
to Credit Jamboree
BY 3. c. FORBES.

To flood the country with half
billion emergency bank notes at this
time would drive gold to Europe,
would sravely aggravate credit in
flation here and render our last state
worse than our first We have al
ready in circulation the largest vol
uns Of bank notes ever put out.
We don't need more, but less
credit, less borrowing.
Secretary MoAdoo's unexpected
announcement that he stands ready
10 issue s5o0,ooo,0OO Adrich notes is
a direct invitation to go on a jam
boree. New York bankers-who,
after all, do know something about
banking-have been striving with
might and main for months to cur
tail the credit expansion that has
gone to perilous len~ his throughout
the country. Thev have, moreover,
praetieed what they have been
preaching: loans here have been
risidly discouraged, spectators have
been obliged to stop their antics and
liquid resources have been zealously
accumulated in preparation for au-
tumnal needs.
But country banks have gone on
their way merrily, lending to all and
sundry. The expansion in national
bank losrj alone has been at the
rate Of 100000 every business day
for the last twelve months-without
one cent addition to cash r hand 10
l2stify this initiation.
Bank notes are not capital
The scarcity is a scarcity Of cap
ital, not currency. Newly bossomed
"exoerts" on national finance would
do we'll t. insert that fact into their
noodles and keep il there in a prom
inent place. More nonsense is be-
ing written and spoken about fnan-
eisl subjects BY men in prominent
positions than at an" time since
William Jen. ings Bryan ehampioned
his famous sixteen to one"
Washington can not create capital
by opening currency food gates. Cap
ital can come into being only through
the people spending less than they
earn-that is, by saving. The urgent
need to-day is for less borrowing, not
for more borrowing, la Secretary
MeAdoo's latest proposal
Let the Wilson administration be
assured that the more bank notes
they pump into circulation at this
time, the easier will it be for Europe
to take gold from US. We have ex-
ported $4,000 900 gold within the last
five months and the chances are that
more will 90 within the next fort.
night. Europe is hungry for gold, the
medium that speaks all languages and
can do duty in any land She will
leave US our emergency currency and
take our yellow metal.
To the novitiate the prospect of
releasing s5oo,OoOooo additional cur
reney is most inspiring. II Intoxi-
Gates. But those who can see below
the surface, those who can diagnose
the difference between bank notes md
actual wealth, shrink from eontem-
plating the outcome Of any wholesale
issuance of emergency notes at this
juncture. Borrowers should pull in
sail between now and the crop NOV
ing season. They should not rush
deeper into debt.
The Treasury Department should
not dissyate resources at this time.
1t should fortify i.sejf against the
abnormal demands shat she market
ing Of bumper crops can not fail to
entail. In non panic, but oulinous
times, all banking Institutions should
eurta.l credits. It is only when a
crisis is imminent that a policy Of
granting generous and prompt assist.
snee should be adopted and courage
ously followed.
Ii is a pity that the Treasury De-
partmeut has elected to hold itself
aloof from the best banking minds in
the country and go bliudly ahead.