New-York tribune., 1918-02-17
government control Of pretty much every
thing. Cotton always excepted
1t is we'll that the country should see
clearly the issue involved
MIR. Vanderlip's Vacation in California

After an arduous five months of organ-
zat1on of the war savings stamps cam
palgn, it is announced that the chairman
of the committee, Mr.. Frank A. Vanderlp.
will take q vacation in California. MI.
Vanderlip finds himself in need of a rest
AS n clear thinking observer of cause
and effect, he could scarcely view with
out WEAKNESS Mr.. McAdoo's extraordi~
nary scheme to place in the hands of four
men whom he might name power to add
tour billions Of paper money to our pres
cnt money stock Of around five billions.
Mn Nanderlip could see, as apparently
Mr. McAdoo cannot. the tremendous eff
iect this would have upon prices and the
cost of living, and all the long train of
evils which fiat money imitation invariably
carries with it.
Mr.. Vanderlip had set about to sell to
the smaller wage earners of America
those to whom a dime or a quarter counts
as much as dollars or gold eagles to more
fortunate folk, two billions of war saving
stamps. Mr. McAdoo presses upon Con
gress scheme to further assist the down
ward course of the purchasing power OF
( the dollar by a huge issue of fiat money
And the result of this would be to make
the little 50 war saving certificate worth
say, $3.50 in the things it could buy.
The nature of this wildcat finance was
very clearly set forth in the last monthly
circular of the National City Bank We
quote again from its admirable prescnta-
ton of the case:
at is said that there must be more
credit IN order that business can be man
died upon this price level, but prices and
the supply Of credit act and react upon
each other. More credit means more
1acllltles to the public for bidding against
itself. When facilities for making pur-
chases increase faster than the facilities
Tor making goods, with demand situation
like the present, any amount of credit will
be absorbed. Legitimate expansion be-
comes pure imitation.
"1his purchasing power. nut into
circulation by government operations and
remaining III circulation. supports connect
tlon with the government for labor and sup
Plies, Increases the cost Of everything il
must buy, decreases the purchasing power
oil ITS income from taxes and bond sales.
compels corresponding increase of taxa
ton and loans, makes a greater debt to be
period, and when the earnings and profits
of taxpayers likely to be much lower
than in war time Furthermore. il pro
notes the creation of great body Of pri-
vate Indebtedness which will have to be
worked out after the war under similar
onerous conditions
ut is especially important that these
principles shall be clearly compyehcnded BY
the bankers of the country in order that
the policies of the Federal Reserve Board
and of the Treasury Department shall have
intelligent Interpretation and support
throughout the banking system.'
This sane and excellent summary
penned by the very able economist who
was brought by Mr.. Nanderlip to the Ma
tional City Bank, could scarcely have beer
agreeable reading to the little group OF
rainbow fnanciers which surrounds Mr.
McAdoo to, we believe, his very great
detriment and in which the Honorable
John Shelton Williams formerly of the
Seaboard Air Line, wears a shining
aureole.