The commercial. (Union City, Tenn.) 190?-193?, 1913-11-07
Two Cracking Prophets.

4
]. Hill says the financial market is
'waterlogged with bonds. +"
The first of these statements is will
full and shameful Misrepresentation.
The Federal Reserve notes provided for
in the Glass bill will have collateral Sc
curity at least equal in value to that be-
hind national bank notes and cash
reserve for redemption more than six
times as large as that behind national
bank notes. They are not to be forced
legal tenders. They have no charac-
teristic in common with fiat money,
and this Mr.. Vanderlip knew all the
| time.
The second statement-that OF Mr..
Hills dangerous half-truth. There
are, OF course, tens of millions Of dol
lars worth Of bonds seeking market
just now that remain unabsorbed, !"
as the street" puts it, But what Of it.
No man who takes the most casual
interest in financial matters needed Mr..
Hill to tell him that this is time when
capital is more than timid--positively
retiring ALI over the world. Good COM
mercial paper bears per cent INTEREST,"
The Bank OF England rate is 5 per cent;
many prophets believed it would go ~
last Thursday and were pleasantly dis
appointed. Bank reserves the world over
are unusually large.
Scarce buyers always mean glutted
market. There are no more bonds than
usual-only fewer purchasers. This by
the way.
But Mr.. Hill takes blue view, not
only of the bond market, but of bonds.
Municipal issues-his imagination stag
/ gers as he thinks Of the municipal in
debtedness now concealed behind tenn
porary makeshifts." Industrials, he
says, are worse yet. He views with
alarm the securities issued against I'M
developed property mines, timber, irri-
gated lands. Public utility bonds are
no better than the rest. He sees a
CLEAN of hope for railroad bonds, but
it is but CLEAN.
From the point Of view of common
sense this is utter rot. Are bonds good?
Give it up; are eggs good2N The one
question is as sensible as the other
There are eggs and eggs. Good eggs
are always in demand and are worth
their price. Good bonds are always in
demand and are worth their price also.
The buyer, anywhere, must beware.
No woman can 60 into grocery and
buy provisions, vegetables and fruit
without loss unless she keeps her wits
about her and her eyes open. The
same thing is true in the bond market.
To-day is good time to buy good bonds
as any investment expert will tell you.
And there has never been good day
to buy bad bonds, so far as we have
seen or read. Does Mr. Hill remem-
Der any such?
But these remarks OF two croaking
prophets OF i'll omen have an impor-
lance to the general public outside the
ranks OF financiers and investors. What
IS a panic? In country like ours where
famine is impossible, war almost out OF
the question for geographic reasons and
the producing power OF the individual
high, panic is nothing but unreason-
ing loss OF ordinary business confidence.
| The business fabric on which all our
Jobs and our incomes depend is held
together by the confidence Of each man
that the people who owe him whether
for work, goods, the use of money or
professional services--are not only hon
est but able to pay. Destroy that and
chaos results.
Now here are Messrs. Hill and Van
derlip. The first creates DOGGY out
OF nothing and willfuIly misrepresents
pending financial legislation. He ac-
cuses the Administration Of being about
to deluge the country with fiat money
a thing as far from the intentions Of the
| leaders as law restoring blood-taint is.
The second states a commonplace fact
with regard to the security market-the
| fact that there are many bad securities
on sale for those who buy ignorantly
and careIessly, and that they are not
selIing-as if it were new and there
were some special menace in it.
1t is just such talk as this--untrue or
one-sided statements from men whose
names carry weight in the commercial
and financial world--tha prepares the
way for the forces Of unreason and panic.
We do not desire to muzzle Messrs.
| Vanderlip and Hill. Why does not Mr..
4 vanderlip read the Glass bill before he
comments on it and find out what is
behind the notes it contemplates issu-
ing9 Why does not Mr.. Hill tell bis
hearers and readers how to distinguish