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 Jdmboree
BY 3. c. FORBES


To flood the country with half
billion emergency bank notes at this
time would drive gold TO Europe,
would graveIy sggravate credit in
flation here and render our last state
worse than our first We have al
ready in circulation the largest vol.
ume of bank notes ever put out.
We don't need more, but less
credit, less Borrowing.
Secretary Mckdoo's unexpected
announcement that he stands ready
to issue S5co,OOoo0O Aldrieh notes is
q direct invitation to 60 on a jam
borse. New York bankers-who,
after all, do know something about
bankins-have been striving with
might and main for months to cur
tail the credit expansion that has
gone to perilous LEM his throughout
the country. They have, moreover,
praetieed what they have. been
preaching; loans here have been
rieidly discouraged, spectators have
been obliged to stop their antics and
liquid resources have been zealously
accumulated in preparation for au-
tumnal needs
But country banks have gone on
their way ~errily, lending 70 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--wjthout
one cent addition to cash -r hand TO
justify this initiation.
Sank notes are not capital.
The scarcity is a scarcity Of cap
ital, not currency. Newly blossou1ed
EXPERTS on national finance would
do we'll t. insert that fact into their
noodles and keep It there in a prom
inent place. More nonsense is be
ing written and spoken about hnan-
eisl subjects by men in prominent
positions than at an time since
William Jen ings Bryan ohampioned
his famous "sixteen-to-
Washington can 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, a la Secretary
MoAdOo's 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
10 take gold from US. We have ex-
ported $4,000, coo gold within the last
five months and the chances are that
more will 60 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 s5oOOoooOO additional cur
renoy is most inspiring. II rntoSi-
Gates, But those who can see below
the surface, those who can diagnose
the difference between bank notes and
actual wealth. shrink from oonten1-
plating the outcome Of any wholesale
issuance Of emergency notes at this
juneture. 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.
II should fortfy itself against the
abnormal demands that the market
ing Of bumper CROPS can not fail 10
entail In non panic, but 9nirous
times, all banking institutions should
curtail credits, It is only when a
crisis is imminent that a policy OF
granting generous and prompt assist
snee should be adopted and courage
ously followed.
It is a pity that the Treasury De
pertinent has elected to hold itself
aloof from the best banking minds in
the country and 90 bindly ahead.