Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1920-08-01
Richmond Automobile News
MOTOR TRUCK PAPER IS
ACCEPTABLE At BANK
Statement That Such Discounts Arc
Ruled Against Is Declared
Ungroundcd.
GOVERNOR HARDING QUOTED

Head of Federal Reserve System
- Declares Member Banks Arc En-
= tircly Free to Use Own Discretion
! in Dealing With Applications.
re In response to urgent requests for
some definite ruling concerning the
discounting by banks OF motor truck
portant Federal reserve districts have
announced Il position which appears
TO be most favorable 10 the motor
truck industry.
ghe common excuse among bankers
for refusing credit on motor truck
:. laper is certain supposed rulings of
mepts made by some OF the governors,
: however, show c~onclusively that there
is no ruling Of the Federal Reserve
Board which Restraints any banker
SGron extending all reasonable credit
: u motor truck buyers.
DAVID Thomas. gIrera! MANAGER OF
ISOLATION, with headquarters i'll Chi
Sago. has spent considcrablc time in
Wnshingt9n WITH, f.dernl rcsSrys
motor truck manufacturers Through
other sources. also. h. has endcavOred
to trace the causes of the credit prob
lem which has proved so Troublesome
for both makers and dealers in motor
trucks
Position Is Explained.
>. He says: The position which the
Federal Reserve Board has taken is
most satisfactory to the motor truck
industry. Ii is not discriminatory for
or against any industry by name Its
position is clearly stated that if the
motor truck were fully appreciated
by the public and h bankers. there
would be no motor truck credit diiii-
MIR. Thomas also quotes from n
letter written by Governor Harding
OF the Federal Reserve Board. in
Washington. -. c., to Senator owen.
In part, the letter reads:
THE board is insisting that all
banks use Il discriminating judgment
those which are necessary for the
production and distribution OF the
, lasic necessities OF life, such as cloth
ing. food and fuel"
bankers iilnwcd Latitude.
In he opinion OF MIR. Thomas, the
transportation advantages Of the
motor truak alone entitlc it to favor
able consideration by bankers. ac-
cording to the above letter. He also
quotes from n statement hy the Fed
cral Reserve Board in May showing
The latitude allowed bankers in OK.
tending such credits. The statement
reads:
II, is the view OF the board that
while Federal reserve banks may
. lions with member banks to discrimi-
nate between essential and noncs-
sential leans, nevertheless that dis
elimination might much better he
Z" 'N' ' So So'N - - 49,
banks themselves. The individual
banker comes in direct contact with
his customers because OF his famlii-
-hr!ty, not only with the customers
business. but with the general bust
ness. condition and needs In his inn
mediate locality. In making loans he
is bound by no general rule OF law
: AS TO the character OF tho purpose for
the loan Is being asked. lie Is
entirely free TO exercise discretion ana
. 1rake one loan and decline another as
: his judgment may dictate"
: WcIlborn IL Quoted.
. in order TO further corrobora;e the
above statement. MIR. Thomas sub
!. mits a letter which he received from
: NJ. II. Wellborn. governor Of the Fed
p eral Reserve Bank at Atlanta, Ga.
The letter reveals a wide and con
needs and a thorough comprehension
OF the value Of tho motor truck "a a
means OF transportation and produc-
ton. II rrads. in part. as follows:
REPLY TO your telegram with ref
: crcnec 70 my views as to the action
:. of the Federal Reserve Bank in At
: lanta in connection with rcdiscount-
= ing automobile paper and the distinc-
= tion made between h is termed
: tractors-thc credit situation NJ this
time IS such hat ! feel W. have
reached a point where 1t is impcra-
: tive that We should have an i~ntclli-
/. gent and discriminating policy OF
: control over credits, especially those
: extended for pleasure and Injuries.
. and for that reason we are RESTRICT
: ing credits for financing tho pur-
: chascs OF pleaSiIre automobiles.
!. p saruH 'fIarsiiIi,,.d"s' S are ..'s so S WHSY
crippled we are doihg n useful pub
!. lie service in continuing TO grant
credits for financing trucks and trac-
: tors.
AT the present. the crcd,, sltua-
ton is pretty closely interviewer with
= transportation: being tied
up due 10 lack o! transportation OF
: necessary goods. The false policy
: OF the public for years past In re-
gard TO the common carriers injured
. them to the extent that their credit
has been greatly impaired and the
: public Is now suffering as the result
= of their treatment of ~. railroads.
3 81 feel that anything that can be
done TO encourage production and the
: sale of motor trucks Will he OF real
value TO the transportation problem:
= and in view Of :hc shortage of farm
- labor and the necessity for increased
production - trp"stuns. think the
entire country VIII BENEFIT from the
manufncturc ana sale OF tractors.
r Very truly yours.
6Signed) M. y. WEILRORT.
j. In the last analysis. according 10
8 Mr.. Thomas. when hanks refuse
= motor truck ape on the ground that
= il il prohibited by rulings of the
s. Federal Reserve Board they arc
= merely passing tho buck" !, IS clear
. ~ M TO the local banker to accept
or reject motor truck paper.