The Washington times., 1920-05-19
BANKERS URGING
BAN ON LUXUR|ES
Financiers Say Non-essentiaIs
Are Keeping Prices
High.
Continued from First PageD

gets his money. This done, he can
repay his bank loan and probably
have a profit made. Until delivery
he has nothing.
Multiply this instance by thousands
and the credit situation brought
about by the traffic congestion Is eX-
planned. Banks all over the country
have their money out on these loans.
Both bank and manufacturer are un-
able to obtain their funds until the
Jam breaks; nor can the jobber and
the wholesaler get the goods he has
ordered and needs to carry on his
business.
Another angle is that many manu-
facturers have goods completed in
their warehouses but cannot sell them
for cash with which they can repay
their bank loans. made to finance the
production, because the transporta-
ton situation renders 1t impossible
for them to obtain cars. Some OF
them who have been able to obtain
the cars and load them, see them
still standing on the sidings because
the freight congestion is SO great they
cannot be moved TO destination.
In this way freight cars and money
Just now are the same thing. On the
switches, along the sidings, in tic
country hundreds Of millions OF dol
lars of bank credit are locked up
awaiting the breaking of the traffic
jam.
jam Has Caused Emergency.
Tho committee of bankers which
today urged the Interstate Commerce
Commi ssion and the Shipping Board
to use drastic measures If necessary
..wl.s
pointed by conference OF leading
bankers OF the country which vas
called by w. r. G.. Harding, governor
of the Federal Reserve Board, to con-
slider means of remedying the present
strained credit situation. Without a
dissenting voice these bankers at
tributed the indisposition of the
nations business to the transportation
tic-up. The need for conference to
devise relief arose from the fact that
the congestion constitutes an emerg-
cncy. Normally, the manufacturers
and others who borrow money from
the banks in order to carry on their
affairs. sell their products in the fall
and winter and pay off their loans in
the spring.
Because of the especially heavy de-
mands of business, due to the post
humous influence Of the war, more
money was owing to the bankers than
usual this spring. but most of II would
have been paid had 1t not-be for the
switchmen's strike, which tied up so
much goods. The very period in
which the business men OF the coun-
try are normally paying off their loans
was the period when the strike and
the succeeding car shortage and con-
gestion came. They could not liqui-
date.
Now, the season in which the
farmers will require vast sums of Dor.
rowed money with which to move the
crops will begin in sixty to ninety
days. This impending demand, with
the banks already fully loaned up be-
cause of inability to get their bust
ness funds paid back to them helped
to constitute the emergency which
dictated the calling of the conference
one of the most important business
meetings which has been held in the
United States in years.
Must Revise Diet.
Ono Of the penalties OF indigestion
In TINT the patient must revis~ his
dict. He must stop consuming those
foods which have aided to upset the
normal fupctionine OF his digestive
organs. He must deny himself the
tld-bIts and luxurious morseIs Of
which he IL particularly fond II may
tnke considerable will power or stern
orders OF the doctor. hut ~ he wants
to get well he must follow this dis
agreeable course.
The shortage OF credit in the United
States must be remcdied by the ap-
plication OF some temporarily harsh
measures. There is just so much
money or bank credit to. go around to
supply everybody, and when a good
sized share to this is tied up in rail-
road cars, especially drastic steps
must be taken to ration what Is left.
IL is agreed that certain goods used
by tho people may be classed as ne
cessities and certain other goods as
luxurlcs.
The war brought home to American
people as nothing else had before the
difference between essentials and
noncssentials. This classification must
in some sense be revived to meet tn.
present situation, and, as Governor
Harding, of the Federal Reserve
Board, says, the American people must
revive their war spirit to overcome
this emergency
Autos Must Ne Given Up.
Ono OF the luxuries which must be
given up with the greatest reluctance
IL the automobile. Automobiles cost
much money. Automobile companies
are willing to accept notss In pay