Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1913-06-17
DANGER SEEN IN
S500,00O,000
NOTE ISSUE
Forbes Says McAdoO's Readiness
to Give Out Paper Is Invitation
to Credit Jamboree
By 3. c. FORBES.


To food the country with half
billion emergency bank notes at this
time would drive gold TO Europe,
would sravely aegrRvate credit in
flntion here and render our last state
worse than our first. We have al
ready in circulation the largest vol
une Of bank notes ever put out.
We don't need more, but less
credit, less borrowing.
Secretary MeAdoo's unexpected
announcement that he stands ready
to issue s5oo.OOo,oOO Aldrich notes is
a direct invitation to go on jam
boree. New York bankers-who,
after all, do know something about
bankire-have been striving with
might and main for months TO cur
tail the credit expansion that has
gone to perilous lem hs throughout
the country. Thew have, moreover,
praetieed what they have been
preaching: loans here have been
risidly discouraged, spectators have
been obliged 20 stop their antics and
liquid resources have been zealously
accumulated in preparation for au-
tumnsl needs.
But country banks have gone on
their way merrily, lending to all and
sundry. The expansion in national
sank loans alone has been at the
rate Of 100000 every business day
for the last twelve months-without
one cent addition 10 cash r. hand to
Jlstify this imitation.
Bank notes are not capital.
The scarcity is a scarcity Of cap (
ital, not currency. Newly biossomed /.
experts" on national finance would /
do we'll t, insert that fact into their
noodles and keep it there in prom /
inent place. More nonsense is be-
ing written and spoken about finan-
eial subjects by men in prominent
positions than at an. time since
William Jen, iugs Bryan ohampioned
his famous sixteen to- one"
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 Ia 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
TO take gold from US. We have ex-
ported 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 novitlate the prospect Of
releasing s5OO,OOO,oOO additional cur
reney is most inspiring. It intoxi-
Gates. But those who can see below
the surface, those who can diagnose
the difference between bank notes md
actual wealth, shrink from eontem-
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.
It should fortify itself against tho
abnormal demands that the market
ing of bumper crops can not fail TO
entail. In nom panic, but ominous
times, all banking institutions should
eurtail credits. 1t 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-
psrtment has elected to hold itself
aoof from the best banking minds in
the country and go blindly ahead,