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

To flood the country with half
billion emergency bank notes at this
time would drive gold 70 Europe,
would gravely ageravste credit in
hation here and render our last state
worse than our first. We have al
ready in circulation the largest VOL
urne 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
TO issue $500, 100000 Aldrieh notes is
. direct invitation to 90 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 perlous Lem his throughout
the country Thew have, moreover,
practieed what they have been
preaching: loans here have been
riaidIy discouraged, spectators have
been obliged to stop their antics and
liquid resources have been zsalousIy
accumulated in preparation for au-
tun1nal needs.
But country banks have gone on
their way rerrily, 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 nonths-without
one cent addition TO cash r. hand to
justify this initiation.
Bank notes are not capital.
rhe scarcity is a scarcity Of cap
itai, not currency. Newly blossomed
experts" on national finance would
do we'll t. insert that fact into their
noodles and keep II there in a prom
inent place. More nonsense is be-
ing written and spoken about finan-
eial subjects by men in prominent
positions than az an. time since
William Jen. inss 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
esrn-thst is. by saving, The urgent
need to-day is for less borrowing, not
for more borrowing, a la Secretary
-R.,1,.I
Let the Wilson administration he
assured that the moro bank notes
they pump into circulation at this
time, the easier will il be for Europe
70 take gold from US. We have ex-
ported $50, 100000 gold within the last
five months and the chances are that
more will go within the next fort.
nleht. 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,oOo additional cur
rsney is most inspiring. II 'ntoSi-
Gates. But those who can see below
the surface. those who can diagnose
the difference between bank notes and
actual wealth, shrink from oontem-
plating the outcome OF any wholesale
issuance Of emergency notes at this
junoture. Borrowers should pull in
Nail 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.
Il 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
ourtail credits. II is only when a
crisis is imminent that policy Of
granting generous and prompt assist
anee should be adopted and courage
ously followed.
II is a pity that the Treasury De-
partment mas elected 60 hold itself
aloof from the best banking minds in
the country and 60 blndly ahead.