Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1913-06-16


billion emergency bank notes at this
time would drive gold to Europe,
would graVely aggravate credit in
fation here and render our last state
worse than our first. We have al
ready in circulation the largest vol
unne of bank notes ever put out.
We don't need more, but less
credit, less borrowing.
Secretary McAdoo's unexpected
announcement that he stands ready
to issue $5O0,ooo,OOO Aldrich notes is
direct invitation to go on jam
boree, New York bankers-who,
after all, do know something about
bankirg-have been striving with
might and main for months to cur
tail the credit expansion that has
gone to perilous len~.hs throughout
the country. Thew have, moreover,
prscticed what they have been
preaching; loans here have been
rigidIy discouraged, spectators have
been Obliged to stop their antics and
liquid resources have been zealously
accumulated in preparation for au-
tumnsl needs.
But country banks have gone on
their way nerrily, lending to 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 r hand to
justify this initiation.
Bank notes are not capital.
The scarcity is a scarcity Of cap
tal, not currency. Newly blossomed
experts" on national finance would
do we'll t. insert that fact into their
noodles and keep it there in prom
nent place. More nonsense is be-
ing written and spoken about finan-
ciaI subjects by men in prominent
positions than at an time since
William Jennings Bryan champiOned
his famous Sixteen to one"
Washington can not create capital
by opening currency flood gates. Cap
itaI 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, rot
for more borrowing, la Secretary
MoAdooIs 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-
sorted s6o,Ooo,o0o gold within the last
five months and the chances are that
more will go 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,ooo,oco additional cur
rency is most inspiring. It lntoxi-
Gates. But these who can see below
the surface, those who can diagnose
the difference between bank notes md
actual wealth, shrink from contem-
plating the outcome of any wholesale
issuance of emergency notes at this
iunoture. 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 thus time.
It 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
curtai credits. It is only when q
crisis is imminent that a policy Of
granting generous and prompt assist
anoe should be adopted and courage
ousIy followed.
It is a pity that the Treasury De-
partment has elected to hold itself
aIoof from the best banking minds in
rho counfrv and oo bIipdIv ahead