Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-07-16
.LOOSEN|NG CREDIT
URGED BY BUSINESS
Bankers Asked to Relax Atti-
tude of Extreme Caution
to Aid Commerce.
BY J. C. ROYLE.

Business men. especially those in the
construction industry, are urging bank
ers to relax their attitude of extreme
caution. These men describe the situa-
ton in paraphrase of the old line of
poetry, declaiming, Money money all
around, but not a cent to lend" That
unquestionably is an lexaggeration. but
the fact remains that the banks are fuh
OF money, while business men declare
they cannot borrow it, despite the low
money rates prevailing.
The amount of money egailabla was
adequately shown by the fact that the
Treasury Department was able to Dor
row $50,000,000 at rs per cent for a
short term to meet its pressing needs.
That indicates there is a nuye volume
OF money in the banks, ready 10 GO into
anything as safe as Government secur-
tiles. especially short-term securities
The bankers, however, do not ..eem ready
to put it into ventures which have
more OF an element of business risk,
even though that risk is one they have
deemed negligible in the past.
Conditions frightened.
Instead of loosening credit and coll
lateral and other security requirements
many of the bankers have tightened
them. AS result businessmen can
not now obtain credit for ventures
which could have readily been approved
year ago. The bankers defend their
stand by declaring that imitation re-
suited from the easing of credit restric-
lions and that they have no intention
o! making the same mistake twice. in
view OF the smashing blow dealt by
the stock market drop last Fall
Some trade leaders point out that
the time when business is extremely
good Is the right time to curtail credit
ana not when business, industry and
trade need cash to get back on a paying
OASIS. Businessmen are beginning to
exnlolt more and more what Lynn p
Iailey, governor of the Federal Reserve
Bank of Dallas, calls economic i'm
patience" They want to see recovery
proceeding rapidly enough so that the
gam can be measured by the naked
eye. Mr.. Talley said it has been his
experience that there is always money
Tor investment in America and that
the amount is in direct ratio to the,
quality OF the investment available.
Practice What They Preach.
! Many business men declare the time
/ to take chance" is when things are
bad and need bracing up. Then, they
say, is the time to relax the rules which
tend to restrict borrowing for legiti-
mate business enterprises and thus
stimulate the flow of cash into business
and Industrial arteries.
| Some business leaders are practicing
what they preach by making credit
easier for their own customers to Sc
| cure. They are carrying buyers foi
| longer periods and on smaller payments
! Tor amortiSing their debts Bankers
who have recently made investment
surveys say that the American public in
| the last six months has absorbed secur-
| ity issues totaling over S3,815,000 This
| Is about 10 per cent below the total
| reached in the first half of 1879. This.
Is held to indicate that if investments
| are attractive from safety viewpoint.
money can be raised readily through
their sale to the public The decline
in brokers loans is cited as an indica-
ton OF the hard boiled" attitude of the
| banks.
.(Copyright, is3o)