Evening star., 1931-06-13
Special Dispatch to The Star.

nomic breakdown in history, we nave
not had any semblance Of financial
panic" such as characterized some pre-
vicus depreSSions, Rome C. Stephenson,
president American Bankers Associa-
tion, declared before the American In
stitute of Banking convention. Terming
unemployment the greatest public prob
lem in the country today. he said that
the sooner we can get our masses Oh
workers back into jobs on almost any
terms the better it will be for both capl-
tai and labor.
The Surest way to bring the Nation
out of the business depression is to raise
the pressure of pubic confidence to the
point of becoming a dynamic force" Nh
Stephenson said, declaring that he was
not peSsimistic about the future. Com
menting on the general agreement that
the bottom of the depression has been
reached, he said there is such a thing
as "overstaying a depression" just as
there is of "oyerstaying a bcom." He
added:
Banking and corporate finance in
this period are unf1inchingly taking
their portions Of short rationS and en-
forced self-denial that the nations need
fer readjustment demands. Interest
rates on money. yields en- securities and
dividends on corporate Investment have
all OTOpDtu 10 lENt4S IIIlJ NOllSJ4 wv
drastic reductions in the compensation
cf capital. These are but part of the
necessary economic realignmentS that
all phases of the countryS working life
must go through before a general re-
vival of industrial, business and flnan-
cial activity can get under way"
Praises Institute.
He commende dthe Institute and its
work to the people of the country as an
earnest that our banking structure and
our banking people warrant their con-
tinued confidence He pointed out that
at no time has the banking structure
as a whole been shaken and has always
been ready during this recession to eX-
tend support and cooperation to trade
and industry. Bank workers, who are
making themselves more valuable to
banking through taking educaLiona!
courses of the institute. are rractlclng
the best kind of Job Insurance. he de-
clared
Mr.. Stephenson said he thought it
would be agreed that the worst aspect
of the collapse of the period OF falls
prosperity" that preceded the present
situation IS the condition Of insecurity
for employment in industry and busi-
ness which it CAUSED.
Oll-IlkJlO1IllCI4G - Vic HO4'G wa -
cut that the worker can suffer" he said.
1t is the worst cause of stagnatlon
that business has to strive against.
The sooner We can gct our masses of
workers back into jobs on almost any
terms the better it will be for both
capital and labor"
Remarking that some look upon the
matter of unemployment as social or
political problem and Others regard II
as purely an economic problem. he said
he was inclined to the belief that the
more practical approach to the preven-
ton of such situations as general un-
employment presents is along lines Of
economic foresight rather than along
those of social legislation. Economic
foresight is conceivable not only for
the individual. but for business as a
whole, he declared.
The public welfare of the United
States demands that industry adopt a
long-range viewpoint and lay out its
production end distribution plans with
the thought that it is far better to have
long period of good sound business
activity than a short period of franti-
cally ovSr-competitive endeavor,' said
Mr.. Stephenson. This would tend to
lessen overproduction in various lines, to
prevent overeXpanSion of plant capacity.
to avoid overstimulation of public buy
ing and above all, to avoid periods of
slumps and stagnation following periods
of overstipulation with their disasters
of unemployment"
Bankers Mission.
For business, too, he said, there is a
part in such a conception OF economic
foresight. 1t should aim to cooperate
with industry in its endeavor to avoid
reckless overproduction, overstocking
and overselling the public.
In this picture of national economic
prudence, banking and finance, too
have their place" declared Mr.. Stephen
son. Their effort should be to infiu-
ence the use Of credit and other finan-
ciai facilities into channels of sound
public economy consistent with the at
titude I have already sketched for in
dustrv and trade. All finance, whether
current commercial banking or indus
trial investment banking, should seek
by their influence in granting or with
holding credit to stimulate and build
up a balanced economic situation"
Comparing the present episode to
previous depressions, Mr.. Stephenson
declared that while we had a specu-
lative panic and a general economic
breakdown-the worst, perhaps, in oui
hiStory-We have not had any SEM
blance of a financial panic such as oc-
Cured in other years when the credit
and monetary machinery broke down
and we had money panics, suspension
of specie payments and kindred disas-
ters. None of these elements of true
financial panic has been present in this
depression of the 1930s. At no time
was the banking structure, as whole
shaken, despite the unprecedented rate
of small bank failures that it had to
absorb. At no time was the banking
and credit machinery unable to extend
support to the panic-stricken and
broken stock markets and cooperation
to all kinds of business and maRufac-
turing. Any one would have been a wise
our banking and credit structure would
stand up so we'll under conditions sc
bad as during the past two years"
The duty of. the individual in such q
plan for the sounder economic future
for the United States, he said, is tC
make every effort to take care of him.
self and to provide for himself. Neither
government nor industry can do that
for him, he declared. "They can give
MIN the opportunity to succeed. but
they can't succeed for him." he said.
He said that In the American 1IlSCl-
tute of Banking bank workers have the
chance to create greater security fol
themselves by becoming better bank
ers through education and urged that
this is no time to waste opportunity for
sslf-improvement Some $4,000 bank
workers are enrolled in the institutes
courses in 300 cities of the country
but there are several hundred thou
sand bank employees, Mr.. Stephenson
said, and five or six times as many
should be enrolled. The matter OF