The Washington herald., 1922-06-11
C.sH. Warrington Urges
Closer Cooperation
- Of Two Lines.
LARNER IN CHAIR
Flags Politicians Who Assail
Federal Reserve Bank
System.

tive Trade Association. together
with a common understanding of
the various problems, financial and
otherwise. confronting the two fra
ternities, was the plea OF Chester
H Warrington. president of the
Washington AutomOtive Trade AS
ISOLATION. today in the principal
address before the District Bankers
Association in fourth annual con-
venuon.
Mr.. Warrington pointed out that
the approximate annual investment
in the automotive field in the Dis
trict of Columbia Is slightly in
excess of SIO,OOO.OOO. The present
registration of motor vehicles, ne
said, excluding those of other
States, is $4,000. The average
price is $3.50. which gives an in
yestment of $62 100000 OF transpor-
tation equipment on the streets and
highways of the National Capital.
Vast Capital Required.
The problem Of financing the
retail feld is of larger proportions
than the financing required for the
sale OF any other type Of commodi-
ties which are sold to an even or
lesser extent upon time payments,
according to the speaker. The
growth or time payment sales IN
the District of Columbia has been
such that in 1921 approximately So
per cent Of passenger ,car retail
sales were made in this manner.
Approximately 40 per cent of the
total money in the business is in
vowed IN financing time payment
sales.
a large number of these sales
represent trades involving the ac-
ceptance Of the used car to COM
pIete the transaction on the new
one" he declared. The transaction
involves a loan on the original car.
a mortgage on the unpaid portion
of the ,ew car. and the sale of the
used car, which in the majority Of
cases again carries a mortgage on
the unpaid balance. From this con-
sideratiOn of the total volume In
volved in the financing of time pay
mert sales. it is evident that the
retailer cannot be expected TO do
this financing in the way sucn mat
ters are being handled in other re-
tail fields
Problems In Financing.
TO the banker. therefore, this
presents a fundamental relation "a
the loan on a motor vehicle, and the
specific loan should be based on two
cardinal points, to my mind, sale
ability of the car and reliability of
the retailer to whom the loan is
made.
This problem cannot be met
thOToUghly, and financing of auto
mobile sales will be surrounded
with some difficulty until it has
been worked out FlucJuating
prices add to these difficulties. be-
cause the value of the vehicle
seized for nonpayment is uncertain.
andrthe amount to be spent in its
recondittoning and the subsequent
amount to be secured from it's sale
are" factors that cannot be deter
mined within narrow limits. 1t is
at this point. therefore. that / feei
concerted action on your part Is
necessary" he concluded.
Lnrner Reviews Year.
President Larner. in officially
the years activities of the organi-
zatiOn. laying emphasis on the good
work accomplished by the sixteen
committees named during the Pc
riod, each selected TO work out spe-
Cifc problems. The president als6
advocated the affiliatiOn of the asso-
citation with the Chamber of Com
merce of the United States and rec
Omrnended that the council of ad-
min'stration Of the bankers body
take up for early action the matter
of revising their bylaws.
Banking is no longer a profess
sion for the uninitiated." according
to Mr.. Larner. 1T is a profession
which requires the closest atten-
tiOn and highest order of intelli-
gence. The basis of banking is the
money of the depositor and its sue
cess is the conservative investment
and management of the funds of
both 1t would seem. therefore,
that it is not so much what a bank
has as what it does with that in
trusted to its care; and again not
so much what il does with its net
profit as with its gross profit.
The magnitude of the RESPONSE
bility of the banker can scarcely be
understood" Mr.. Larner said. "The
volume of money in circulation has
increased by leaps and bounds. un-
Til we are thinking in billions of
dollars and not in the ordinary
scale Of millions. All this great
volume of money flows through
the channels Of trade and through
the banks like a great Niagara.
threatening by its very weight
to crush those who handle IL.
But the banker stands at his
post through ii all and while many
derelicts have been left in the
pathway Of this great flood. there
are many who have withstood the
tempest of the great war and the
money craze which 1t precipitated
upon the world"
Defends Reserve system.
Political attacks that now men,
ace the. Federal Reserve system, if
successful. would destroy the great
bulwark Of defense in the United
States against panics such as Wis
tied this country time and again
before Inauguration of the system.
declared Fred n. Shepherd. execu-
tive manager of the American
Bankers Association. The greatest
menace to the Federal Reserve
System is political" he said
There are now in Congress some
forty bills which would do any,
thing from making slight amend
menr. to the act to destroying alb
soluNly its intent and purpose
During tStress and depression
seems to be the easy thing to try
short cut and undertake to bring
about by legislative enactment that