The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-10-01

ton and how much harm he could do
If he committed ayoldablc mistakes of
speech or action. In spite Of the ac.
Acknowledgements which he now makes re.
spcctlnc the unwarranted character Of
his public Indictment OF New York
banks for charging excessive prices for
loans. II is altogether likely that Mr..
McADoo'S recent utterances on the sub
iect of bank reserves and interest rates
have done harm which cannot he RENE
died readily.
The head Of the Treasury Depart
mcut would from the very nature If
his connection with the whole rcld 81
finance, which is one Of the most seri-
Gus matters of human concern, be- ex.
pcCtcd tn speak with the utmost So
briefly. His words must carry with
them the impress Of authority. II I'M
fortunately happens that there i at all
times good deal of popular deluSon
about financial affairs, and at times
like the present the state Of economic
strain stimulates good deal of dis
ordered thinking Very much that Mr..
McADoo has said lately could hardly
fail To encourage decisions about the
function Of hank note currency. the
lending and borrowing Of money or
credit and the price which bank accom-
mediation should command.
These are not the days for too
severe criticism Of public officer or a
private citizen who Is trying mHnfullv
10 do his part to meet the emergency
with which American business has been
confronted by the European war. but
Mr. MCADOo has exhibited since he
hcrame Secretary Of TN" Treasury Il
ready disposition 10 criticlse the bank
ing community harShly, especially the
banking leadership which is exercised
from New York aud other large cities.
He has been altogether too ready To
use the language of accusation and CO.
ercion i'm his statements relative Ia
the banks and the money market
II Is not much more than year
since he made tn" prepoStcrous charge
4 that the New York bankers were con
( spring 10 dcpreSs the market for Gov
rrument bonds in order to exert an
! Influence on IN" pending currency leg
islHtion adverse 10 the purposes Of the
/ Administration, In dispensing Gov
eminent funds To depositary banks for
aid In moving the crops the announce
mcnts Of Treasury plans In the Nc
4 4 II. l.I a..
against the financial centres ~ the
country.
Nor have appeals to prejudice been
the only disturbing feature of some nj
Mr.. MCAnoO's public communications
They hav. betrayed. among othc,
things, no little ignorance as to the re
latiOns Of currency and credit, notably
In respect 10 the uses Of emergency
circulation. The series of statements
which Mr.. MCApoo heEnn TO issue q
week or 50 ago regarding the accumu
lGtion Of bank reserves, the grant o'
credit aud the rate Of interest, rNh'h
tied degree Of rccltlessness which
suggested both prejudice and ignorance
Nlll ~ - NV Nhi ~ AN4Aa- 'l'A Nv - N'N
finding himself mistaken.
Had the Secretary of the Treasur,
confined his recent discourse to an eI
planatory discussion Of banking dut!
under the circumstances of the sltua
ton created by the war. THE SUN l. o
THE opinion that some good could hay,
been accompli shed by n friendly direc
ton of attention to certain excessive
denominations of bank reserves. r.
the extent that these nccumulations in
conmodutlon at a time when access +
crcdit Is the only way of relief fo
trade ana industrial strain, Nr. Nc
ADoo would have been justified Il
bringing to notice tendencies towar
boarding by banks.
Sound banking practice calls for tn
liberal grant Of credit TO all deservln
borrowers at q critical iuncture. II
still not apparent, however, that tn
small amount Of inordinate piling u
Of bank reserves in proportion TO tn
general contraction Of reserves SUI
ports the Treasury contention tia
American bankers as II whole have NJ
been doing their duty. Moreover thcr
are So many angles from which tn
policy NJ any bank must be- considere,
@ and banking in the last analysis is 5
4 mucrl matter Of individual Iudemen
J. that the Treasury announcements re
r ntive to reserves might well have bee
o couched in less accusing terms an
r ncnacing tones.
a. when the Secretary "f III" Tr"a suT
c went from the question of reserves
Is the question Of rates Of interest
N rrod IN dangerous ground all the MOI
J. dangerous because he disclosed co