Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1918-08-06
RESTRICTION OF Credits
SPECULATION LOANS NOW Prohibited

nish Money that is Necessary fol-
the Conduct Of Enterprises that ar,
Necessary for the Conduct Of tht
War; But Not for Ordinary Speeu'
| lation.
I Washington. August 1.-The Fed.
eral reserve board thinks II the ap-
propriate time to issue statement
expressing its views upon the prin-
ciples which should guide the action
OF the banks in the curtailment OF
unnecessary credits.
1t is clear that If the war require
ments of the government are TO be
financed without undue expansion OF
banking credits. not only must there
be some reduction OF existing credits
but there will have TO be applied Il
rigid check upon the further eXpan-
sion OF credit in directions not clear
ly essential for the prosecution OF the
war and for the health and necessary
comfort of the people. 1t is no more
possible to superimpose upon the vol
ume OF pre-war credits the immense
volume OF additional credit required
by the government for war purposes
| than to superimpose upon the volume
of pre-war production of goods the i'm
mense volume of additional goods re-
quired by the government 10 prosecute
the war. Our problem Is to convert
less essential into more essential
credit and to convert less essential to
more essential production and distri-
button of goods. The saving of credit
and money goes hand In hand with
the saving OF labor and materials in
the programme of adjusting the bust
ness of the nation to Il war basis our
best hope OF avoiding competition be-
tween the government and its citizens
for credit, money, labor and materials
which can only result in credit and
price imitation and higher costs OF
living. is saving.
AS trustees Of the individual bank
ing credit of the country the bankers
are charged with the duty Of studying
and understanding the programme in
order that each and every one may
In turn educate his borrowers and the
people OF his community to the ne
cessity of saving credit as we'll as food
and other materials, and may there
the use Of the government as far as
may he practicable.
1t is not the purpose Of the board
to suggest the specific ways in which
credit should be conserved or unne-
cessary expenditures curtailed: each
banker must determine this for him
self. The board can only discuss the
subject In general terms with en-
phasis on the necessity 'that while
lcredlts conservation should he under
taken promptly 1t should be carried
out gradually with reasonable discre-
tion and with the least possible avoid
able embarrassment to the business
| individuals and industries. Proper
education of borrowers and customers
to the needs of the situation will ac-
complish far more than abrupt dis
elimination or pressure.
In the absence of any official classi-
| fication of the moro essential and tho
less essential things and enterprises
1t will be necessary for each banker
in determining how he may do his
share In the conservation Of credit to
use his own Judgment. There seems
groups of loans:
(a) Loans to facilitate production
or distribution.
b) Loans for production OF
non -distributive purposes.
Loans for Non productive or Non
distributive Purposes.
Loans for productive or non
distributive purposes are usually loans
for non-csscntial purposes. The fol-
lowing are types of this class ol
loans:
Loans for purchasing or carrying
property. whether real estate or per-
sonal securities:
Loans or additions to or improve
ments Of property not used in produc-
tion or distribution.
Loans to states or municipalities fol
improvements.
BY inquiring the purpose for which
each new loan Is required and declin-
ing wherever practicable to grant
loans of these classes and by gradu-
ally causing existing loans of these
classes to be reduced or eliminated
bankers could conserve credit without
causing hardship and also give many
people an impetus to save at a time
when saving Is of vital importance
to the nation.
Loans to Facilitate Production or Dis.
tribution.
The three main groups OF borrow
ers for production or distributive pur.
poses are farmers. manufacturers
and merchants.
!. Farmers.-The farmers are be-
ing asked to produce more than ever
before and loans for productive pur-
poses must have the right of way
But the kind Of loans which should
be discouraged or declined are:
(a) Loans for the acquisition OF ad-
ditional property. urless the area un-
der production is to be increased
thereby and immediate results may be
expected.
(b) Loans for any construction not
necessary to the productiveness Of the
farm within the year, and
(c) Loans for the purchase of ar.
ticles of comfort and luxury.
In sections where farming profits
have been large an endeavor should
be made to induce farmers to apply
a good portion Of them to the reduc.
tion Of long-standing loans or to the
financing of their seasonal require.
ments, thereby conserving bank cred.
1t.