The Caucasian., 1913-10-28
M'ADOO SAYS rs
ARE SAFE ASSET
New Bonds I Good Invest
ment, Ayers Secretary.

menI, AveIS SeC[6ldIy'
FACTS WIDELY DISTORTED.
Treasuey ospstmeet Head sasrpls
eriticisg Bankers Whs Disseminate
0isinformatisn Regarding Governs
0ent Per Cert Bone Issxs-~seosrs-
Gse ssave Mary Advantages
Dapksrs % ell parts or tho country
aes Writine 60 tho treasury depart
0ent &c tnformation 40 60 chat will
Be Che effect oe the pending currency
eetorpa Dit spon government = per
Gent bonds. Secretary McAdoo has
made pdblie o letter he bias addressed
o. e D. puncaa OF Little Rock Ark.
as typical Of the eeplies he q making
% all such inquiries.
have Sous tettee in Which You in
close copy Of o circulas issued by
bankers Of 50. Louis in reference 20 che
q per cent bonds. the secretary wrote.
Il am surprised that . reputable bank
ing house would sponsor eirculas dis
closing such Q lack Of information
apop s0ch an tmportant mattes. II
goo Gave eeae the pending measure
yes will see that the governments il
aeaeing more Chan eairly with Che bold
ors Os these securities.
pUsision Fss escAsnse
The eiil eoptains Che following pro
Vlsiooe:
.Ff%-T1ag the 6olders or Che 2's
nay syehoage them for 3 Der cent
oonls wtthput the circulation privilege.
crowded. the entire amount exchanged
q sAs one yeaf sball nos exceea per
eer1 Of the outstanding 2s. This is a
privilege granted O. the banks which
they may % may not exercise. as their
in6mst dideates. Certainly n is not a
disadvantage to have this privilege.
Second. .-Thet at tie end of twenty
years eli the outstanding 2's shall be
paid at par anA interest. AS it now
stands the 3 per cene bonds are re-
deemable after 1880 at the pleasure OF
the government only. They are. there
fore. 'irredeemaele SO long as the gov
ernment does not choose to pay them.
The bill gives them definite due date.
No one would be SO rash o to claim
that this Injuries their value.
Il cannot understand why any ma
tional bank should sell it's bonds at
present quotations Certainly there is
nothing In the pending legislation to
justify such action. My attention has
recently been called to items appearing
in various newspapers and to state
dents in circular letters privately dis
tributed calculated to cause apprehen-
sion about the per cent bonds.
THE effect Of all this seems to be
the crea ton of belief on the part of
few nervous people that the curren-
cy measure Is so bad that numbers Of
the national banks will go oR Of the
system II the bill should be passed and
that a large aaSouat Of 2s will as a
result seek q market; that the markeb
will be too narrow to absorb all the
offerings and tAst the price may there
fore go very low. A reasonable amount
Of. reflection should satisfy any one
that there is no danger OF this even
tualtty. Every day bankers from diff
ferent parts of the country visit 4he
treasury department. They express
themselves with great freedom. /
have yet to find one who has deter
mined to quit the national banking 4 U.s.
TEN II this measure is enacted.
Even II number OF the banks
should retire from the system very
much larger number will undoubtedly
remain in It. and the banks that re-
main will require larger amount Of
bonds to supply the deficiency of cir
culation.
Present Quotation Misleading.
''The present market quotation for
government 2's should not be taken
too seriously. II does not indicate real
value. The president OF one OF the
largest southern banks was in my Of
hce recently and told me that he de-
sired to buy s1S5.OO0 Of the 2's He
said that be was assured by New York
bankers that II be gave this order to
purchase at the market 1t would re-
suit In advancing the price several
points
II have had some suggestions made
to me that the government ought to
maintain the 2's at par. but the gov
ernment is under no legal or moral OBJ
legation to do this. There is only one
way In which the government could do
It. and that Is to 60 into the market
and buy the bonds whenever they are
offered.
Il can see no ground for apprehen-
sion BY the banks about the currency
bill or Its effects. am confident that
the, measure when passed will be ac-
ceptable to the country and that it viii
prove OF enduring benefit to the banks.
to the general business interest and to
all Of the people. This is not a time to
take counsel OF foolish and unfounded