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.

Sy b. =, FOhbES.
To flood the country with half
billion emergency bank notes at this
time would drive gold to Europe,
would graVely aggraVate credit in
fiation here and render our last state
worse than our first We have al
ready in circulation the largest VOL
un1e of bank notes ever put out.
We don't need more, but less
credit, less borrowing.
Secretary MeAdoo's unexpected
announcement that he stands ready
to issue $500, 100000 AIdrich notes is
a direct invitation to go on a jam
boree. New York banksrs-who,
after all, do know something about
bankine-haVe been striving with
might and main for months to cur
tail the credit expansion that has
gone to periIous Ien1ths throughout
the country. They have, moreover,
practieed what they have been
preaching: loans here have been
rIsidIy discouraged, spectators have
been obliged to stop their antics and
liquid resources have been zeaIously
accumulated in preparation for au-
tumnai needs.
But country banks have gone on
their way userriy, lending 10 all and
sundry. The expansion in national
bank loans alone has been at the
rate of 100000 every business day
for the last twelve months-without
one cent addition to cash en- hand to
justify this imitation.
Bank notes are not capital
The scarcity is a scarcity Of cap
ital, not currency Newly blossomed
experts" on national finance would
do we'll to insert that fact into their
noodles and keep It there in a prom
inent place. More nonsense is be-
ing written and spoken about finan-
eial subjects by men in prominent
positions than at an" time since
William Jennings Bryan championed
his famous "siNteen-to -one."
Washington oan not create capital
by opening currency flood 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
MoAdoo's latest proposal.
Let the Wilson administration be
assured that the more bank notas
they pump into circulation at this
time, the easier will it be for Europe
to take gold from us. We have ex-
ported 100000, 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 novtate the prospect of
releasing s5oo,OoOoOO additional cur
rency is most inspiring. It Intoxi-
Gates. But those who can see below
the surface, those who can diagnose
the difference between bank notes and
actual wealth, shrink from contem-
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 dissipate resources at this time.
1t should fortify itself against the
abnormal demands that the market
ing of bumper crops can not fail to
entail. In non panic, but ominous
times, all banking institutions should
curtaiI credits. 1t is only when
crisis is imminent that policy of
granting generous and prompt assist
a1ce should be adopted and courage
ousIy followed.
1t is a pity that the Treasury De-
partment has elected to hold itself
aIoof from the best banking minds in
the country and go blindly ahead.