The Washington times., 1924-01-30
n. N.Y.F|NANC|ERS
READY To AID .
WEST
Metropolitan Banks Willing to
Aid Northwest Banks
If Needed.
By w. s. COUSINS.
Copyright. 1924, by Cosmopolitan
Naxv- Can1ytoa \

news SeEVlC0,)
NEW YORK, Jan. 30.-New
York city bankers have as yet not
been approached" to aid in
strengthening out the banking
situation in the Northwest. They
have not withdrawn their interest
from the problem. and stand ready
to assist, II called upon, either
through Government or banking
channels. They believe the efforts
Of the Government and its various
agencies, the War Finance Corpo-
ration, the Federal Reserve Board,
the Federal farm loan system and
the Federal intermediate credit
banks, will produce all the credit
facilities necessary to relieve SOL
vent banks, and those beyond aid
Of conservative credit will have to
cease business.
I'VE have not been approached
for additional credits to aid in the
strengthening of the banking posi-
tion Of the Northwest section"
Alvin H. Krech, chairman Of the
board Of the Equitable Trust Com
pany, said today. I'VE believe the
Government agencies, which have
been called upon to operate in this
matter, are entirely adequate to
handle the situation, and we look
Tor beneficial results to follow the
work OF the Federal Reserve Banks,
War Finance Corporation and other
agencies, which have increased their
facilities in that territory"
Blames Unwise Banking.
An officer Of one Of New York's
largest commercial banks, who
served his apprenticeship in Mime
sofa and neighboring States, char.
acterized the financial troubles of
the northwest as partly economic
and partly due to unwise banking.
The banking ills date back prior to
the world war, when too many
small banks, with insufficient re-
sources, were chartered by State
banking boards. and too large a
proportion of these resources were
tied up in loans on farm lands at
inflated values, their liquidation to
depend upon the subsequent sale
at still higher prices.
Many of these banks have since
been hobbling along in hopes Of
working out of their difficulties,
and some Of them have made good
progress along the road to complete
rehabilitation. Those which have
recently announced their inability
to meet obligations have simply
been forced under by the unwieldy
loads acquired in war time specula-
ton.
After the war a large amount Of
money was withdrawn from these
State banks and sent to the
financial centers, some of It en-
ployed in the call loan market on
stock exchanges. When the farm.
ers complained to their representa-
tives In Congress, the Government
established new agricultural credit
agencies to advance monies both
for the purpose of farm lands and
the financing Of agricultural pro.
ducts to the markets. Since that
time credit has been available in
ample quantities, though, of course,
the bars were put up rigidly against
land speculation.
Against Speculation.
AS has been frequently pointed
out the best way to put a premium
on good banking is to make ID i'm.
possible for bad and reckless forms
OF banking; and banking was never
intended as an adjunct to specula-
ton.
The economic ills of agricultural
sections Of the northwest are due to
causes over which men have less
control: Several years of bad crops,
especially In the one-crop districts:
Severe competition Of the Canadian
crops, and the DETECTION of interest
from the American grain centers:
unfavorable conditions in the live.
stock markets, and top prices for.
meat animals and costly economic
experiments by various political
groups in North Dakota and else.
where.
Granted an adequate supply of
conservative credit, at reasonable
rates, which both Government and
local bankers are able and willing
to supply, the most effective rem
edy for the farmers troubles is,
fair crops and fair prices for these
crops. Lacking this basic founda-
tion, too liberal credit Is a menace
instead of an aid an has alraodv