The Washington herald., 1918-08-15
CREDIT LIMIT
<ISPLAN OF U. 5.
Government to Curtail New
Commitments During the
War, Says Holland.

are now under way.
But there Is to be established
speedily. in fact. II Is already begun,
what may be called q negative infiu-
enee made necessary by the exigen-
eies Of the war. This IL . strong
movement in the direction Of restric-
ton of credit for non-essentials.
Business men all over the country
are giving heed to this movement and
wondering how greatly 1t will affect
their own enterprises
One OF the diff1culties that arise In
establishing a restriction Of credit Is
In reaching q decision as to what con-
sututes a non-essential and what an
essential In the financial district II
Is reported that President Wilson,
who Is understood to have given much
confederation to the subject, has not
yet been able to make up his mind
what are the factors which constitute
an essential as differing from q non
essential
II reports be correct, the President
Is disposed to believe that It il i'm
possible to establish any universal
test. Many times what appears to be
non-essential industry Is neverthe-
less closely related to or associated
with an esentiaL
better part not so greatly to restrict
these non-essentials as to reduce the
earning power of the people, for II
that be done there will be inevitably
a reduction Of the ability to pay
taxes.
One Of the leading bankers Of the
United States. an officer In the Fed
eral Reserve system, said lately that
IL is now clear that the ability of the
United States to meet future demands
occasioned by prolonging Of the war
Will be chiefly proportionate to our
ability to save and that the saving
habit must be much more widely
adopted by the people.
What Banks Are Doing.
Bankers all over the United States
and especially those in control Of the
Federal Reserve bank Of this district
rae giving serious consideration now
to the part the banks must take in
preparing for future war demands. 1t
is the understanding that borrowing
from the banks in the expectation
Of the notes being renewed is to be
greatly curtailed.
The government Is taking the posi-
ton that the public can now get
along without new parks, new public
buildings. new irrigation plants or the
reclamation OF land until the close Of
the war. And il that is the view of
the government respecting these pro-
jects it will also be the view of the
banks respecting ordinary banking
transactions.
The banks are beginning to realize
that credit restriction must go far
beyond the question Of public flnanc-
ing and in fact so far as to reach the
financial operations OF the individual.
Speculative enterprises must wait un-
til the end OF the war. Borrowing
for permanent investment can also
wait.
However. there can be no general
rule adopted. Each case must stand
upon its own merit and be the subject
of the discretion OF the bankers.
Nevertheless the purpose to restrict
credit 50 as to confne II to essen
tials Is one OF the most impressive Of
the evidences that the United States
is in a war which il of stupendous
proportions and is likely to be of
even greater proportions before It Is
ended.
Ine1haustible Resource.
1t Is announced that construction
work is soon to begin, II it has not
air-nitrates corporation which is to
be established at Toledo and which
when completed will represent an in
yestmeut OF twenty million dollars
he plant is to be built upon a f1ve-
"cte tract at the mouth OF
the Maumee river. There is no reason
TO doubt the ability Of the contractors
TO have the plant completed in eight
months. When It is in operation at
least ten thousand men will be en-
ployed in the works and in the ac-
cessories.
The exigencies OF the war COM
PEELED the United States to learn a
lesson which Germany and Norway
might have taught US some years
ago. We were relying for our nitrates
upon the deposits of Chill. although
It was known that at the rate of
consumption OF this Gillian nitrate
that field would be exhausted in a few
years.
Nevertheless our men Of capital and
leaders Of industry paid no heed to
the fact that an American had DEM
onstrated at Niagara Falls that it
was possible by means Of electricity
TO secure nitrogen from the atmos-
phere and to do It to commercial
advantage.
The men Of science estimated that
over three or four acres OF land hover
ed atmosphere reaching far up to-
ward the zenith which contained more
nitrogen than Is to be found In all the
deposits OF Chilli
Norway took up this American dis
covery and invention and utilized cleo
tricity equivalent to 1000 horse
power in securing nitrogen from the
atmosphere. Germany speedily took
the hint and her men OF science i'm
proved upon the process. Had Ger
many not done this she would have
been unable to maintain war Her
explosives are based upon nitrogen
which is obtained from the atmos-
phere-
Now the United States Is establish
ing great nitrogen plants, one of them
in the South. and 1t is the under
standing that another Is to be estab-
lished at Niagara Falls. One Of the
largest Of these plants Is the one
which Is to be, within eight months,
in operation at Toledo.
These plants will be in operation
after the war Is ended and It Il pre-
sumed that among the results follow
ing the establishment OF them will be
the ending OF the imports of Chilian
nitrates. We have learned how to
obtain from an inexhaustibIe resource
and by an inexhaustible resource.
Watsrpower converted into electricity,
all the nitrogen that we need.
HOLLAND.