Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-01-08

AT present, ne
added, there is questioning of banking
because banks have failed. In many
cases these failures arise not because
of Encouragement or negligence on the
part of the bank officers or of specula-
ton by them, but from causes entirely
beyond their control Although credit
has reached its highest development In
the United States, we have not yet
learned how to control it. Attempts by
banks to control credit or to ration
credit have not been conspicuously sue
cessful. Scarcely more than year
ago when such attempts were made
bootleg" money--that is, money from
sources outside of banks-poured into
the New York Stock Exchange to the
amount of over four billion dollars,
greater by one billion dollars than that
supplied by banks.
Curb on Credit Needed.
Banks are indissolubly connected with
manufacturing and distribution. They
supply in part the funds which make
these operations possible. We must pre-
vent a return of a situation when the
abundance of money outside OF BANK
ing channels puts the extension OF
credit beyond their control. Its abuse
reacts on banks and through disturb
ance of price levels breaks down orderly
hardships on banks customers which
tend to break down buying power. This
in turn robs corporation stockholders
of prospective income.
It Is impossible for banks to meet
conditions prejudicial to them and
which are created by lack of co-opera-
ton within an industry or between in
dustries. There is today call that
productive industry shall seek leg1sla-
a. Al oh oT1d
standards in production, and in conSe-
uuence insure a more regular trend in
American economic progress The pres
ent method leads to dissatisfaction, to
human suffering, to political upheavals
and to unwise legislation. 1t tends TO
discredit the wisdom, judgment and
ability Of leaders in industry and bank
ing. Unless as business men we can
eventually solve the unemployment
issue, solutions viii be attempted by
government in which business men viii
have but q small part.
Problems In Oil Industry.
At present in the United States. joint
action among concerns engaged in SIM
liar activities is all but impossible. 1t
Is only necessary to note the attempts
of the petroleum industry to work out
q program Of conservation. Laws and
regulations impede at every turn. In
consequence there is overproduction,
earnings in the industry have declined,
stockholders have suffered reduced In
come and the future supply of petroleum
Is endangered.
The effort to stabilize industry ID
making progress, Mr.. Stephenson de-
clared Already large employers Of labor
are arranging production so that en-
ployes can look forward to regular work
and eventually, when their stint is done,
to pension for their sunset years. Does
any honest skilled worker deserve less?
Should not that be a goal toward which
united industry will strive?
message Of hope for the current
year is that concerning agreement
among Eastern railroads. embracing the
territory east of the Mississippi River
and west of New England and including
the Virginian Railway on the southern
boundary and the New York Central on
the north, for consolidation into four
great independent systems, in order to
meet the policies expressed by Congress
in legislation enacted 10 years ago.
Formal approval OF the matured
plans will increase the financial sta
bility of the roads, as we'll as their abil-
ity to meet competition. 1t will afford
basis for the completion of plans rel
alive to additional terminals, electrifl-
cation and other necessary projects,
thereby increasing opportunity for en-
ployment.
Bank Deposits Growing.
Despite the low condition of business.
the waning of confidence and the most
intense discouragement, our country
has suffered little diminution in real
wealth. Savings deposits in banks are
greater than year ago. These de-
poSItS constitute a reserve and in such
times as the present furnish bulwark
against a more extensive depression.
Vital statistics, as well as life insur-
ance companies figures, bear witness
to the good health of our people during
the past year. Never before in the his
tory of the country have leaders in buSt-
ness given so much conscious thought
and attention to providing employment
for wage earners Many millions OF
dollars are being expended for modern
izing and re-equipping plants.
More significant than all this is the
research constantly prosecuted in trans
portation, in chemistry, in physics and
in applied science of every kind, with
the object of discovering formulas which
will still further diversity industry, in
crease employment, make higher the
annual realized national income, fur
nish more creature comforts and create
higher standard Of living.
AS month succeeds month inventories
In America will be reduced, thus hasten
ing the day when unemployment will
give way to employment and in conse-
quence dismay and pesSimism will retire
before hope and buoyancy of spirit.
Nothing so develops versatility and re-
sourcefulness as hope; nothing so in
hihitS them as fear and its close com.