Edgefield advertiser. [volume] (Edgefield, S.C.) 1836-current, 1920-04-07
Worst Financial Panic in His
tory is Approaching.

tion's history is approaching unless
congress finds way to cut down eX-
penditures, according to statement
by Representative Frank w. Mondell,
of Wyoming, majority leader of the
house today. A floating Indebtedness
of more than two and half billion
dollars war cover hang" constitutes
a serious menace to American fnanc-
es, Mr.. Mondell said. He warned
against overconfdence in recent op-
timistic reports based on the fact
that during the month of March
there was a reductino of approXi-
mately s75O,OOO,OOO in the floating
debt.
'sThis reduction was due to the
fact that the government paid a large
quantity of short time certificates as
the became due, out of the first in
stallment of the income and excess
profits taxes, but the treasury i'm
mediately entered the market for a
large volume of loans on short time
certificates at increased rates of in
terest.
Treasury Officials Complimented
Mr.. Mondell, in his statement,
compliments the treasury officials for
their conduct of the present danger
Gus financial situation and added:
sBut the treasury cannot perform
miracles and the best management of
the treasury cannot avert diaster, un-
less we keep public expenditures with
in our income"
The country can only hope to
avoid financial panic by keeping eX-
penditures for the fiscal year begin
ming June 80 we'll within our income,
according to the house leader. Unless
we do this, declares Congressman
Mondell, 'we are inviting treasury
conditions which acting upon the fl
nancial situation in the country, will
bring nationwide disaster" he adds:
Contrary to popular belief, the
peak of our war expenditures was
not reached during the war but some
months after the signing of the arm
istice and bequeathed US deficit or
war overhang, not covered by bonds
or provided for by current revenues,
of upward of two and half billion
dollars, which has been carried in
short time certificates running from
three months to a year.
Serious Menace At Amy Time.
"Such an enormous volume Of un-
covered Indebtedness would be Sc
rious menace at any time. 1t is par
ticularly so at tir Z when the coun-
try is trying to recover from the abb
normal conditions of war.
"The increasing gravity of the Sit
uation arising out of this enormous
volume of indebtedness that must be
renewed from time to time, is indi-
Gated by the fact that while all OF
these certificates that were offered
sold readily in the spring and sum-
mer of 1917 bearing an interest rate
of 8 per cent but less than 100000
600 of a recent treasury offering Of
certificates at Az per cent were sold
and the treasury will be in the mar
ket in the very near future for loans
on short time certificates at a "a
with the probability that the rate
NAV have to be advanced even to 6
per cent, or twice the interest rates
of certificates of three years ago."
Will Not Prevent Panic.
Congress realizing the gravity of
the financial situation, was going to
reduce the proposed expenditures
carried in the Book of Estimates by
million and the quarter dollars, Mr..
Mondell said. This great reduction ne
noints out, will not prevent finan-
cial panic unless "new and unneces-
sary adventures in public expenditur-
es'' are cut to the core.
The specie basis of our currency
may be completely wrecked If we try
to meet the situation by further is.
sues of bonds, Mr.. Mondell declares.
"Further bond issues could only be
floated at greatly increased rates, at
the cost of considerable reduction in
the market value of outstanding gov
ernment securities and further in
crease in the cost of living. Under
these conditions further bond issue
is unthinkable. Let me repeat with