The Lancaster news. [volume] (Lancaster, S.C.) 1905-current, 1918-08-06
Banks Are Told BY Federal Re-
serve Board to Curtail
Credits. 81
UNLESS FOR ESSENTIALS
Rigid Check Necessary on Cred
it's if War Requirements of
the Government Are to Be
Financed.

Lancaster banks are In receipt of
the following statement from the
Federal Reserve Board and it has
been given out for publication as of
very general interest and import
ance.
1.-The Federal Reserve Board
thinks 1t the appropriate time to is-
sue statement expressing its views
upon the principles which should
guide the action OF the banks in the
curtailment of unnecessary credits.
ut is clear that IL the war require
3 ments Of the government are to. be
financed without undue expansion Of
mixing credits. but there will have
Nbe applied a rigid check upon the
.sther expansion of credit in. direc-
Ssions not clearly essential for the
Atosecutlon. OF the war, and for the
IN and necessary comfort of the
people. NJ is no more possible to
superinpose upon the volume Of
prewat credits the immense volume
of additional credit required by the
+ superimpose upon the volume of pre-
war production of goods the immense
volume or additional goods required
by the government to prosecute the
war. Our problem is 10 convert less
essential into more essential credit.
and to convert less essential 10 more
essential production ands distribution
of goods. The saving OF credit and
money goes hand in hand with the
saving OF labor and materials in the
program of adjusting the business Of
the nation to asgwar basis, and our
best hope Of avoiding competition
between the government and It's citi-
zens for credit, money, labor and ma
terials, which can only result in
credit and price imitation and higher
costs of living, is saving
banking credit OF the country, the
bankers are charged with the duty
OF studying and understanding the
program in order that each and every
ers and the people of his community
to the necessity of saving credit as
well as food and other materials, and
may thereby conserve the credit OF
his bank for the use of the govern
ment as far as may be practicable.
1T is not the purpose OF the board
to suggest the specific ways in which
credit should be conserved, or un-
necessary expenditures curtailed; ;
each banker must determine this for
himself. The board can only discuss
the subject in general terms, with
emphasis on the necessity that while
credit conservation should be under
taken promptly 1t should be carried
out gradually, with reasonable dis
erection and with the least possible
avoidable embarrassment to the busi-
ness of individuals and industries.
Proper education OF borrowers ana
customers to the needs OF the stua-
tion will accomplish far more than
abrupt discrimination or pressure.
I'm the absence of any official
classification OF the more essential
and the less essential things and en-
terprises II will be necessary for each
banker in determining how he NAV
do his share in the conservation of
credit to use his own judgment.
There seems to be. however, two
clearly defined groups Of loans
"(a) Loans to facilitate produc-
ton or distribution.
"tb) Loans for nonproductive or
nondistributive purposes.
Loans for Nonproductive or Nondis-
tributivc Purposes. %1
Loans for nonproductive or non
distributive purposes are usually
loans for nonessential purposes. The
Following are types of this class OF
loans:
Loans for purchasing or carry
ing property, whether real estate or
personal securities.
Loans for additions to or i'm
rrovements of property not used ! in
production or distribution. '.
Loans to states or municipalities
fdf improvements.
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