New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-05-19
MIR. McAdoo's Blunder

The money income of the people of the
limited States is about fifty billion dollars
! wear. Therefore, the task of absorbing
a popular government war loan OF TWO
billions is, or ought 70 be, relatively easy.
II requires the investment of only four
nor cent Of the national income. Never
theless the Liberty Loan has stuck on the
WAYS. This is not catastrophe. The
whole amount will be placed. But it is an
unnecessary humiliation.
The operation has been badly managed.
The loan ought to have been oversub-
scribed in three days. It could have been
if the Treasury had utilized the first en-
thusiasm.
Fancy Offering a two billion dollar loan
without naming the terms! That is what
the Treasury did. Mr.. McAdoo's original
announcement was so vague that when 1t
was received at night in the newspaper
Offices nobody could be sure whether 1t
meant that the bonds would be on sale the
day following or not. Such simple infor-
nation as the term of the bond, its lowest
denomination and the manner Of payment
was omitted from the announcement Evi-
Gently Mr.. McAdoo wanted to see how the
people would respond to the idea, instead
of taking it for granted that the loan
would sell itself if it had chance. The
result was a mass of tentative Offerings"
to buy the bonds, received mainly from
banks. These were reported for several
days at the Treasury. The rate per hour
or per minute was enthusiastically calcu-
lated. But nobody could definitely buy or
engage Liberty Bond, because the Treas
ury was not ready with the terms or the
subscription blanks. All that one could
90 was to indicate ones intention TO buy.
A week later people were still asking
for the terms, especially the bankers, who
realized that if the first mass impulse to
buy was thwarted the psychological mo-
ment would pass, and that in such case
they would have to get under the loan and
merchandise it laboriously to the private
investor. That has happened. The loan
is now upon the bankers, who, if they had
been called upon to handle it from the be-
ginning, would have handled it very differ
emily.
When at last the Treasury's subscrip-
ton blanks were ready for distribution
they read:
This application should be transmitted
through the subscribers bank, trust
company or other agency acting in his
behalf, or it may be filed direct with the
Federal Reserve Bank of his district or
the Treasury Department at Wash
ington.
Only the man accustomed to make in
yestments has his bank or his trust COM
pany, or knows the Federal Reserve Bank
Of his district when he sees it; whereas
the Liberty Loan ought to have reached
on first appeal all that great mass Of peo-
pie unpractised in the art of investment.
This might easily have been done. If on
a certain day, after proper publicity, it
had been possible for people everywhere
to go to the nearest postoffice and exchange
money for a Liberty Bond, or to engage
che with an instalment down, the results
would have wonderfully vindicated Mr..
McAdoo's cherished theory that public
finance may be conducted largely without
the assistance of bankers. He was un-
faithful to his own theory.
Now he has. fallen between the banks on
one hand and the people on the other. 1t
- up 10 TIC DdlhS W oth liiC AAbSfty Ivan
without commission. 1t is up TO the
newspapers to inspire and supply the pub
lefty. The Treasury alone could have
sold the loan by putting it into the hands
Of the people. The banks alone could have
sold it easily if they had been asked TO
volunteer their services in the beginning
and TO take the responsibility. The news
papers alone could have sold it over their
counters and would have done it for moth.
ing. Mr.. McAdoo had neither the Wall
Street instinct for successful promotion
nor the courage TO leave il 70 the people.
The consequence is that after two weeks
the loan is only half sold, which is the