Billions & Bankers

How large the public debt of any nation can grow without plunging that nation into disaster is something that no mortal man can calculate. The credit of a nation, like the credit of a man, is good so long as it can make ends meet. After its budget ceases to balance, its credit remains good so long as men believe that its budget will again balance. But how long men will thus believe is not written on the books of any treasury. Conceivably the U. S. might have twice its present public debt and men might still believe its credit good. Conceivably U. S. citizens might go to bed tonight without alarm at the $29,600,000,000 debt of the U. S. and wake tomorrow morning without faith in U. S. credit, unwilling to lend their Government another dime. Faith cannot be weighed in any scales yet invented.

Nonetheless last week in Atlanta, Franklin Roosevelt publicly named a debt figure ($55,000,000,000 to $70,000,000,000) which "many of the great bankers" had told him could be reached before the faith of U. S. citizens in their Government's credit would break. "If the bankers," said the President, "thought the country could stand a debt of 55 to 70 billion dollars in 1933, with values as they were then, I wonder what they would say the country could stand today?"

Next morning practically every U. S. paper carried his speech in headlines as the big news of the day. On the front page of the Wall Street Journal, however, was a small box carrying the information: "New York bankers . . . would like to meet the man who could name the total bearable national debt."

Newshawks interviewing big Manhattan bankers could find not one who would admit naming a safe debt limit to the President, not one who had heard another banker do so, not one who would suggest any banker except Marriner S. Eccles, New Deal Governor of the Federal Reserve Board, likely to have named such figures.

Two days later the Treasury announced that next week it would sell $900,000,000 of Government securities, and U. S. citizens digested the fact that on Dec. 16 they would wake to look upon the first $30,000,000,000 public debt in U. S. history.

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