Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-10-03

come. His business is no longer the
simple function of diScounting COM
mercial bills and lending money on first
mortgages. That is today but part Of
his work. These days, when he estab-
fishes line of credit to business, or
furnishes loans upon securities OF .
business, or advises investment in q
business, he must know the elements
which make for success and failure of
that business. And he must form
Judgment as to the future trend of bust
ness in general.
Part Credit Plays.
ION the other side, the American
business man, big and little, the farmer
and the labor leader are coming more
and more to consult with the banker on
problems of his business. Whatever the
origin of his position may be, the banker
is now the economic guide, philosopher
and friend of his customers, and his
philosophy can dampen our enthusi-
asm and equally 1t can lift our courage
and hope.
1.-THE second point of the bankers
unique position in relation to business
trend lies in the part which credit
plays in the whole business process.
Obviously during the inflationary period
the use of credit for unwise expansion
and speculation draws away the supply
of credit from normal business. 1t i'm
poses upon normal business an interest
rate which strangles the orderly COM
MERGE of the country Commerce sick
ems under this pressure, its pace slack
ems and contributes to collapse. There
fore, I wish to emphasize what has
long been recognized-that is, that the
flow Of credit can accelerate and 1t can
retard such movements. Equally wise
direction of credit provides large con-
tribution to recovery from depressions.
THE third reason why this Is so
much bankers problem is that bank
ing is the one great line OF business &C
tivity that is in itself interconnected.
Each credit institution shares the credit
burdens of others, and all are largely
co-ordinated through national organiza-
tion-the Federal Reserve system.
Agencies Work Together.
"The reserve system and its member
banks and the Treasury participation in
fact form widespread cooperative or
panization, acting in the broad interest
of the whole people. To a large degree
it can influence the flow OF credit.
Bankers themselves are represented at
each stage of management. And, in adj
dition. the various boards and advisory
committees represent also industry,
agriculture, merchandising and the
Government. The reserve system there
fore furnishes an admirable center for
cooperation of the banking business
with the production and distribution
industries and the Government in the
development Of broad and detached
policies of business stability.
You have gained much experience
from the two great crises OF recent
years I trust you will seriously and
systematically consider what further
effective measures can be taken either
in the business world or in cooperation
with the Government in development of
such policies, both for the present de-
preston and for the future. know OF
no greater public service. It Is a serv-
ice to every business man, to every
farmer, to every worker, whether at the
desk or bench. am not assuming you
can do 1t all, or that all disturbance,
domestic or foreign, can be wholly pre-
vented or cured.
"The Government should cooperate.
It plays large part In the credit struc-
ture of the country. It's fiscal system
has most important bearings. For in
stance, I believe an inquiry might de-
velop that our system Of taxes upon
capital gains directly encourages infla-
ton by strangling the free movement
Of land and securities.
Refers 70 Act Of 1920.
1.-THE regulatory functions Of the Fed
eral and State Governments also have a