Evening star., 1925-06-14
BY /. A. FLEMING.

Washington is one of the chief
credit cities in the United States, that
Is In proportion to its population,
therefore it was appropos that the
National Credit Association should
gather here last week for one of the
most important sessions of its career.
Washington is without the great in
dustries that require credit while the
amount of commercial paper original
Ing here is practically nil. Whatever
commercial paper our bankers pur.
chase Is bought from the offerings of
outside paper brokers and is usually
made by Swift & Co., Armour & Co..
and by other large manufacturers and
Jobbers using large sums of money in
their business and seeking credit
where 1t is to be had at the lowest
rate.
Merchants Using Less Credit.
There was a time when our retail
merchants used credit to a liberal ex-
tent but since the great liquidation
days of 1919. they have adopted a
new policy, frequent visits TO market
replenishing stocks, rather than over
stocking to avoid severe losses in the
final cleanup at the end of the sea
son. The result is that they gener-
ally sell their goods before the time
for payment rolls around.
Moreover Washington does very
little business in loans secured by col
lateral stocks and bonds, for the rea-
son that this business like commercial
paper seeks the open market, in this
instance the Wall Street call money
market, where hundreds Of millions
of dollars, belonging to banks in all
sections of the country, find employ
ment, pending their use in business.
Most Loans on Real Estate.
Most of the loans of the trust COM
panies and savings banks are made
to real estate buyers and builders,
and even In this employment of cash
our bankers meet with the severest
competition from life insurance com
panies and large lenders of other
cities. Philadelphia has placed many
millions of dollars on local realty
while the New York Life and other
Gotham institutions have large moneys
invested here. usually at lower inter
est than prevails in this city.
National banks maintain their re-
serves with Richmond, that is. local
institutions do. They participate in
trusts or mortgage loans of one year
maturity. buy paper, meet some de-
mand from merchants and on collat-
eral loans and business interests
generally. OF necessity they are very
large investors in high-grade cor
porate as well as of State and Gov
ernment bonds and notes.
Government Employees Use Credit.
1t may not be generally known. but
II is none the less a fact that Govern
ment employees are large users of
credit and that they stand well enough
to do business on an accommodation
basis. that is. they do not have to
furnish security.
This refers entirely to that large
percentage of workers who have es-
tablished reputation that entities
them to favorable considera ton, men
and women generally, who own their
own homes or are paying for them.
Because of their limited compensation.
there are frequently times when these
people need assistance. Sickness, life
insurance payments. vacation money,
travelling expenses, etc, bear hard on
the workers and they use the credit
that Is at their disposal. Usually
bankers are willing to grant 1t with
proper endorsement.
Use of Credit Very General.
Washington retail stores are among
the largest grantors of credit mer-
chants being so anxious to open charge
accounts that even a fair reputation
will secure all accommodation needed.
Probably Il larger percentage of retail
business is done on credit in this city
than in any other city of proportionate
size.
To one familiar with conditions else
where it looks as if our merchants
were taking too great risks, but they
claim that the losses form such A
small percentage of their credit busi-
ness that it is unimportant.
Here again is a large white mark
due to the people of the National Cap
ital who pay their bills.
There are some delinquents, natu-
rally. and these. after being given
ample opportunity to settle or explain
delays, are finally turned over to the
various collecting agencies.
Many of the younger of the Govern
ment. workers, not having established
their reputation, find it necessary to
make ends meet by borrowing from
other than regular channels, endors-
ing each others notes and paying in
terest as high as per cent monthly.
Poole Discusses Conventions.
Advantages derived by the bank
ing fraternity of Washington from
the annual conventions we're empha-
sized yesterday by John Poole
president OF the Federal American
National Bank. in discussing the
forthcoming gathering of Washing
ton bank officers and directors at
Hot Springs. Va.
Each year shows a growing in
terest on the part of bank directors
because of the great value and bene-
At which grows out of the discus
sions of timely banking matters
the frank exchange of knowledge
and opinions-the intermingling
with men who direct The affairs of
our great financial institutions and
the officers who execute their pol
icies," Mr. Poole declared.
The things so essential to sue
cess in all affairs-business, social
and domestic-are sincere under
standing and loyal cooperation.
These have been developed to their
highest degree in the local banking
fraternity, with resultant benefits to
those who operate and to those who
own the banks-and to the general
public who look to the banks for
service, good counsel and sympa-
thetic assistance.
1--WE have come to learn through
these conventions that it pays best to
be co-operators rather than competi-
tors.
Financial soundness in individual
life in business life, in national life