The Washington times., 1920-05-19

ment for automobiles az that the man
with good credit can haye his car and
pay Tor IL over a period OF months
This must stop when the man wants
the automobile for pleasure or reiaxa-
tion. To doctor and to a few others
an automobile 10 an essential facility
for the carrying on OF business. But
a car 10 not absolutely necessary for
Joy riding for taking one out to the
on Sundays.
The silk necktie is a delight TO the
eye or the observer and a source OF
pride 10 the wearer. Perfumery. ice
cream coSes, soft drinks. Jewelry-
quite number OF other articles of
common use in these prosperous days
or nigh prices 'aTe not essential, how
ever pleasing they are to the con-
sumer.
It will be the policy Of the banks OF
the nation. at the suggestion OF the
rederal Reserve Board, the financial
doctor on this case, to prescribe no
bank credits for luxurious goods OF
this class. And. as money and bank
credlt constitute the lifeblood or
trade the manufacture and consump-
tlon OF these goods must be curtalled.
Ftaeries Are Doomed.
III is not expected that this class or
production shall cease entirely. but
merely that less perfumery shal be
sprinkled on lace handkerchiefs In
order that enough bread may be pro-
duced to keep people from going hun
cry. The more soft drinks consumed
the higher the price OF bacon. be-
cause a big volume OF lemon pop bust
mess uses up bank credit, freight cars
and other facilities which might be
turned to the production and distribu-
tion of bacon.
II bacon did not have to compete
with lemon pop for the facilities or
business, bacon could obtain these IA
cilities more cheaply and could there
fore sell for less. The doctor, the
Federal Reserve Board. says just now
the patient needs bacon more than
pop. regardless OF now pleasant the
havor OF the pop may be.
But this new policy is to be tenn
pered somewhat in order that the
business men who have put their
money into the lemond pop or any
other non-essetial industry may not
lose. Supposng man Is making up
a lot OF pleasure automobiles. He has
invested 500, 900 in materials and la
Dor but that sum has not enabled him
to complete the lot OF cars. II he
can get a loan OF 100000 he can
HHisn up tHe IOt ana sell tntm ior
cash. II he cannot get the 100000
loan he Will lose a large part IL not
all OF the 100000 he already has In
vested. In such a case 1t will be the
policy of the banks TO lend the man
his 100000 so that he can finish the
lot and sell for enough to get his
money all out and pay the bank. In
such case. additional loan expansion
will mean large subsequent liquida-
tion, whereas to withhold the ioan
would mean no liquidation, but loss.
Banks After Prohteers.
But when the man has completed
his lot OF non-cssential pleasure auto
mobiles, he cannot borrow money
with which to start whole new cycle
of production-not until the other
hard-p pressed business men get out Of
the woods. That money must be used
for essentials until liquidation has be-
come general enough SO that there
will be bank credit sufficient for all.
One big thing the banks are going
to do to hit directly at the cost of
living Is TO 1ise their powerful infu-
ence TO stop profiteering. The bank
ers are going home from the confer
ence here and investigate the loans
they have out. In cases in which
they find money has been borrowed
by speculator to enable him to
hoard goods for a rise in price, they
will not renew the loan when 1t falls
due and, in some cases, probably will
call the loan. forcing the would be
profiteer to throw his goods on the
market at fair price. This is one