The independent. [volume] (Elizabeth City, N.C.) 1908-1936, 1929-12-27
We HAVE JUST
COTTOPAYBACK
what WE Owe

Elizabeth City las well as other
carts Of the country, has been
thru an unusually severe credit
strain this year, according to +.
II. William, President of tho Saw
in.s Bank & Trust Company. Mr..
Williams admits that the banks OF
this city have had an unusually
hard year and cites three factors
IS being chiefly responsible for
thc banking conditions this year.
First of these is the stock market.
Al corporations and persons who
had any money sent it to New York
to be used as call money, getting
from 7cc to 10cc interest on it. This
accounted for a slim distribution Of
money in the agricultural sections
Of the country.
It has been hard 20 get mone%
on a reasonable basis this year. The
high rate CT interest charged on
borrowed money accounted for tho
scarcity Of money in tn" South dur
ing the past year. If an Elizabeth
City bank borrowed $4,000, it had
to pay 6os interest on the mona
and was required to keep on hand
balance OF 2J'c CT the amount
borrowed thus getting only $4,000
when it borrowed $4,000. Then,
too. much money from Moth Caro-
lima and the South WAS put on mar
gin with New York brokers this
year.
A second reason for the Stcrnu-
Gus banking conditions il Elizabeth
City this year IS the fact that most
farmers have made 10 money. In
any given community. the aVallabi!-
;ty Of banGable funds depends on
the progress of the community or.
in other words. upon the net pro-
fits OF operations III the community.
Tbs farmers OF this section have
made no money IL the past two
or three years and actual losses have
heen incurred by a number et them.
And since Elizabeth City is the heart
Of an agricultural section. of which
tine farmer is the financial back
bone. the net wealth of the commlA-
ity has not increased over similar
period CT time.
-hc third and most important
reason for the 1929 banking cond!-
tions is, according TO Mr.. Williams
the credit strain with which the
country has been burdened. Credit
has been too easy in this country.
A human is fundamentally q bor-
rover. Nearly every man. large or
small. owes fer something. If one
could but take look at the records
Of the banks, the discount corpora
tions. the land banks. tn: trust COM
panics and the insurance companies
today, he would be appalled, at the
amount of people owe the cs in
stitutionS.
The Carolina Banking and Trust
Company was not inSolvent when
it's doors we're closed last August;
it was afflicted with the same credit
strain with which the rest Of the
country was ooScsSed. The bank
had loaned too much money to its
directors and stockholders. Its loans
were too far in excess of its capital
and surplus. SO its doors were clos
ed.
A parallel TO this case happened a
number of years ago in Elizabeth
City. Half a dozen prominent mcr-
chants and business men OF this
city owed money one to another.
Jones owed Smith; Smith owed
Brown: Brown owed Doe; and so
forth. So they all signed petitions
of bankruptcy, not because they
were actually bankrupt but because
they were in a credit strain. And
that is exactly the trouble with Ellz-
abeth City and the rest Of North
Carolina today. Easy borrowing has
made hard going.
The remedy for this situation is
for all who are in debt, and that
will include practically everyone, to
be constructively economical and
pay what they owe Then, and
then only, will conditions return to
normal and money return to its
normal circulation.