The sun., 1918-08-27
70 REDUCEDOANS
ON NON-ESSENTIALS
vedersl Reserve Bank Makes
Suggestions for Credit
Conservation
GIVES NEW PRINCIPLES
geduction bf Borrowings
should BE Through Per
sonal Economy.

rhs Federal Desrrve Bank NJ Nrv
vr-s sent a letten late vestnrday " all
S,-, hanks. trust companies and ma
.,rnas banks IN the Second Federal
prur-ve District. In which Il is sur-
r~r-as thar the conservation Of rredi1
s.s,-ea i,y the Ilnitpd Stnfes Government
q, y,r the war might I'VE accomplished
,h-nur4. the gradual rfayine on III inars
IN. necessary for the prosecution OF the
~ u hlsn eurrests tfht conservation
a r-ear may he accomplished by at
,i-s,r customers NOT tn uverhuy. curry
,rr \, small sfocsr ms practicable rust-
rnuirr rrw construction ur expansion.
r,b the rrnctice OF economy by inffi-
yiauslt
Ranks tn laying down the principles
n, c-nnr conservatism should spare the
ha--rvs- undue embarrassment and
shoujf arr reasonably and 1udicipusfy,
sc-a-ainr ~ the local Federal 9ssEerve
H,nk The hAnk alsb urges each in
s.5-utitm 10 auAlyxe IT'S loans IN de-
,e-rlns what credit now In use is mt
s,-rrflv connected with Government
financing or the production or distribp
lion o. things necessar-y to maintain the
henf.h and efficiency ~ our armed forces
sne csviliRn pupuiRtiUn. II declares fhni
cr.ft conservation SHOULD he especially
directed where individual loans are az
ing FtRndin&.
b discussing fine ACCESSIBILITY Of rrduc-
I'M loans the Fsdsral Reserve Bank se-
clnyes that borrvwerS nalyad 10 reduce
lnxns should he adv,-ed Of the necessity
q doing SO gradually through the excr-
esar NJ ne-rural eruuuYnipK
II its advice To hanks and trust curn-
,aniss the Federal Reserve Bank sRys
The Federal Reserve Board wrute Won
on July relative 10 the necessity NJ
cunservinr credit IN order to furnish the
Government increasing volume of credit
required 10 finance the war and the Dir
-s-.U-s Of this bank have instructed its
nshrers 10 discuss the suh5ert further
WITH every bank in the district. While
no general rules or programme fu- the
conservation Of credit can Ne lait Gown,
fhe GUY of each nanh is 70 IN irs share
IN securing the Desired results, acting
rsREvTs MY and judiciously. IN such ways
n It's uwn conditions make practicable
ant as well srsare borrowers undue EN-
mr-Rssmeu1 We hHve no doubt that.
lks mos bankers. YOU have already
mace sumt progress toward conserving
credit and our directors wish 10 supple
msrit the Federal Reserve Boards letter
br asking Won INV 10 take M this neces-'
sH-v work systematically and cnnscien-
,iuusHr
Saving Of credit ny hanks in order tn
RELY the situation HR q whole must he
she result of saving IN the part Of
borrower Shifting loans from one in
situtiun tn another OF sales Of collateral
which merely throw the burden upon
rhn~
conservation CHI only be accomplished
b. business or personal economies and
REQUIRES coopeMtton between the hanks
ana their borrowers and education of
Borrowers by their banks
p-odncerH, manufactures and mer-
cha-rts may tio their part and reduce
thetr credit requirements nv no pver-
bring. by CARRYING an small stocks as
p7R-:ica bic and by posrpuninE new con-
struction OF expansion Of their business
Individuals may 40 their part by
UutvtTlg their personal expenses and
efsctfnE economies which will enable
them gradually to pay Of their loans
May we susrest that yor make q
careful analysis Of your lpans and lines
g. discount IN ortier u dste-mine def
nite'~ what credit now In use Is not
directly connected with Government
financing or the production or distribu-
tior ur thinES uecessary 10 maintain tine
health anc efficiency OF orr armed forces
and civilian population. While the ma
brit o. bank loans Will prove 10 be
TO- these purposes. most institutions
also nave a considerable volume Of loans
r. Individuals made for other purposes,
many ut them OF long standing II lis
n iuans % this character as well ns to
las ~
,nes that credit conservation should
f-S he applied.
New commercial lines or new loans
nor-Tr-uduct've purposes. will rarely he
Justified unless they are to aid directly
y the prosecution Of the war A spirit
o. saving II the use Of credit Will nat
urGliy leac the banks themselves to ex-
Grise restraint in offering new or add
uontL lines Of credit in competing for
ousiness. a frank discussion Of the prirf-
c;pief and the necessity Of credit con-
se-vbtlnn with a borrower win usually
Es,r his cooperation. and where Dor
spveT IF asked 10 reduce q loan fevins
securities NJ commodities as collateral
emphasis should he laid on tine necessity
q ErAuua. and steady reduction by per-
soma economies rather than by selling
me collateral
-Ssve-al Of our member banks wish
mr. 70 discuss the matter with their Dor
soVsrs have asked us IN prepare q brief
statement on the subject We have pre-
parsc such = statement which banks. II
ueF 70 desire, may either Use as a form
R-lef - enclose with letter Of their
eVr. We shall be glad 10 furnish either
fG'e-ent IL any quantity to any bank
n - district Copies are herewith en-
tlDvsT
WI. vou be 30 good as ~ acisnowl-
err -..iE ietteT, advising us what you are
aolLE ny are willing 10 do in order 10
'h'e credit and giving US your view 10
NJ He- method OF accomplishing the
i-esss--y ~esults We suggest that one
mos effective step would tie for ali the
pi.Ef II your city or county Il reach an
tgreener. Tor common action. Whenever
MS nguF car properly assist you may
sun uruu our cooperation"