New-York tribune., 1918-09-26
Harding Urges
Banking Aid for
Bigger Production
Bankers Aggressive Coop
Grafton Needed to Make
Liberty Loan Succeed

CHICAGO, Sept. 25.--National banks
were called on to-day by Governor
Harding, of the Federal Reserve Board,
in an address before the America a
Bankers Association to adopt strictcr
measures to carry out government pol
icies of conservation of credit for the
most essential war purposes.
"Your attention is directed" said
Governor Harding, "to the Importance
of increasing our supply of -foodstuffs,
cotton, wool, coal, and all the manu-
factured articles Of an essential char
acter, and it is hoped that you will ex-
tend your credit lines with this object
in view as far as may be consistent
with the principles of sound banking
and business prudence. While it is de-
srable that you should remain free to
the security of loans and the details of
your business, it is necessary, never
theless, that we should all work to-
gether in carrying out a general pol
ICY"
Bankers Help Essential
Mr. Harding said reports to Wash
ington indicate that rumors still are
being spread among ignorant classes
that the government contemplates con-
tiscation Of bank deposits, and suggest
ed that banks inform the public that
this report is absurd.
The success Of the fourth Liberty
Loan campaign, said Mr.. Harding ode
pends on the cooperation of the banks,
not half-hearted or complacent acqu-
escence OH their part on the plans
adopted, but upon their active, inces-
SAINT and aggressive cooperation, given
>:,,,& o,,+1
of the cause for which the loan is to
be raised.'
Charles II. Sabin, president Of the
Guaranty Trust Company, in an ad-
dress on banking evolution, said that
this is G psychological moment for
great developmet in international
banking to back up American trade in
foreign countries after the war. With
out specifically referring to Senator
Ovens proposal for the creation of a
foreign exchange banker, Mr.. Sabin
declared that it seemed important that
government activities be restricted to
the support of such enterprise, rather
than supplanting it."
"In the natural evolution Of banking in
this country it is quite certain that our
vision must extend beyond the state,
beyond the nations, out into the world
at large" Mr.. Sabin pointed out
"Branches Of American banks are being
opened in foreign countries from time
to time. and not only American
finance but American merchant marine
and commerce will be greatly pro-
NOTED thereby, and, with the coopera
tion of our authorities in Washington,
the development of our interest in for
cign trade and industry may at this
psychologic cal moment be most rapid.
i y l..
to the expansion of our own banking
cooperation with foreign banks in some
international banking plan which will
meet the exigencies forced upon us by
the war. With half of the world on q
paper basis, it is certain that some in
ternational banking agreement must be
worked out II we are to stabilize the
worlds token of exchange and expedite
the trade OF nations.
ut seems important that private mi
ative and enterprise should be given
the widest possible latitude in this
field, in keeping with the public inter-
est
at seems equally important to me
that governmental activities be re-
stricted to the support of such enter
prise, rather than to supplanting it.
For instance, the original proposition
10 organize 1OTclEn cNCndnSe Dank
in connection with our Federal Re-
serve system seemed to be unnecessary,
as our present banking system is pro-
viding for these needs with greater ef-
fciency and less expense than would
be possible through any government
agency.
Private Control Urged
"No government financial institution
should be projected into the field Of
competition with privately owned
banks. The governments function
here is that of providing reservoir OF
credit for the assistance of the banks,
and any innovation which would
change that relation appears unwisc
and unjustitied.
''If it could be proved that a foreign
trade bank could be organized as a gov
ernment agency free from such objec-
tions, which would act as service in
stitution in cooperation and not in
competition with private banks, it
might be worthy of consideration, pro-
viding special care is taken in working
out its details in order to avoid con-
flicting interests which might retard
the development Of our foreign trade.
at is certain that we shall need
united effort to meet the competition
we shall face, and in lieu of a branch
banking system and banking amalgama-
tions, American banks must work to-
gether on basis of common interest
nd .n%