Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-11-24
CREDIT SITUATION
| IS HELD TRADE KEY
Business and Labor Leaders
Look Forward Confidently
to New Year.
BY JOHN F. SINCLAIR.


locks the house of American business.
1t is the key log in the business jam.
Give industry and commerce o well
ordered, healthy, flowing credit and
the jam breaks up"
This Is the way Julius H. Barnes,
chairman of the United States Chamber
Of Commerce, close personal friend of
situation after the most extra ordinary
and epoch-making business week Of
decade in Washington.
Let me explain what I mean by Q
healthy credit for business" continued
Mr.. Barnes. "You know q building
recession is always preceded by high
money rates. This last one began in
October a year ago. When building
construction drops it naturally affects
every line that enters into construction
work. When money and credit be-
the year progressed, rates became
higher and the cost Of doing business
likewise increased. This condition af-
fected not only business in the United
States, but money rates throughout
the world. The bank rate in New York
influenced the bank rate in London, as
well as in every other world center.
For gold Is the recognized international
medium for settling balances. We
as We live In a world where large
part of the business done Is with
foreign countries"
Credit Conditions Easier.
"Have credit conditions become
easier in the last two weeks7" I asked.
Decidedly. Call loans, as you know,
have decreased almost to the level Of
what they were year ago. This IA
IF alb fxuA
Every week for the last three the drop
in call loans has been very impressive.
New York banks and those in other
centers report large amounts of funds
on hand. In fact, many Of them have
already entered the bond and &C
ceptance market and are buying at low
rates of interest. This condition Is
likely to continue for some time.
us it your opinion that money rates
will be rather low for the next few
months?"
Every indication points to this. Not
only that. but already New York and
Boston have reduced their rediscount
rates. This has been followed by the
Bank OF England and one or two other
European central banks. Credit In
easing up throughout the world, re-
Sulting from the recently drastic liquida-
ton IN stock markets throughout the
United States.
Now let's continue this idea and
follow it to its logical conclusion Mr..
Barnes went on Railroads always do
construction work when money Is cheap.
SO do public Utilities. They slacken
of when money is high. The same
holds in all lines of building construc-
ton.
Already indications point to an ex-
penditure by the railroads Of about one
Er,y -
another billion. Industry viii follow
suit. providing money can be made
available at rates low enough to make
such construction work attractive. It
looks now as though this most innpor.
tant hurdle has been taken. That's
what mean when say that healthy
credit Is the key log In the business
JAM"
Ford Statement.
1t cannot be denied that Mr.. Ford
alert master of business that he is
appreciated the advantage Of making
the bushes conference clear to the
White House, Mr.. Ford had q state
m MT already prepared dealing with the
s. u9t!cr-a statement striking O claal-
len3.pg note. 1t appealed immensely 70
tn country at large.
We mutt see to 1t that the increased
ws9Hs ere not taken away from our
people by increased prices that do not
p cent increased values" said Mr..
Fori. The country gains no benefit
"',tra hundred dollars and then taking
1t away from him again In increased
rents and rise In prices generally"
Then this statement:
There is no startling, miraculous.
p!cn OF recovery and advance; 1t is all
IS plain and familiar as copybook
maxim. The situation promises much
better than it did year ago. We
were on the threshold of q necessary
change anyhow. and if some men STUN
bled when they crossed the threshold,
it was only because their eyes were else
where. A year ago the country was
expecting something to happen; now
that 1t is over and past, the road ahead
is clear"
When I asked Mr.. Barnes, who has
been selected by President Hoover to
form an executive committee from the
members OF the various groups that
have met the President in these con-
ferences, for his opinion on the prob
lem of wages and prosperity, he replied:
THE original anxiety Of American
business nevSr has been overproduction,
but overmaintenance of buying power
which provides markets for the products
of industry. This is the problem Of
today. Production is adequate. We
want no interruption as these products
60 into consumption"
A different way of saying much the
same thing as Mr.. Ford said.
Position Of Banks.
Today there are approximately
$4,000 banks in the United States. Most
of them are still independent of each
al - fAA d.
chains and branches. But the number
in proportion to the whole Is still rela-
lively small.
Many of the business leaders who
have attended the White House confer
ences of the week . We been anxious
concerning just how The different indi-
vidual bankers, many OF whose Gus
toners have been hurt in the stock
market crash. will meet the credit still
alton in their own communities VIII
they be overcautious about loaning out
their credit at this particular time? It
is felt the tendency will be In that d.
rection.
None of the leaders Is asking for an
overextension of credit to local groups,
but overcaution may do as much harm
to the country as too much credit.
THE consensus among business
leaders Is that fundamentally condi-
lions are sound" continued Mr.. Barnes.
Nevertheless, this is a good time for
the calling of a group of national
leaders who will check up on the Diff
ferent lines of industry and make such
constructive suggestions as are deemed
good for the national business.
This meeting we are calling for De-
cember 4. 1t will meet In Washington
and be attended by approximately $50
leaders from all parts Of the United
States. From this group q small COM
mittee Of 10 to is viii be selected. This
committee viii cooperate In every way
with the Government In the develop
menk nf a sane and orderly aunroach 10