The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-05-20
Big BUSINESS
GROUP To AID
SMALL fry
Millions viii Be Offered
Needy industries, Farmer
and Home Owner.
HITS BANK BOARDING
Coalition Hopes to Free
Money for Relief in
Rural Areas.
By Uaited Prsss

By JMfff0 FFfee
NEW YORK. May 20-A powerful
coalition Of financierS plans to put
to work at once millions in cash.
or almost three billions in credit.
in places not vet reached by the
Reconstruction Finance Corporation
or federal reserve credit expansion
programs.
This will mean. II plans are sue
cesSful, financial relief for small
borrowers in sections of the coun-
City. Banks in these far sections
have used funds released to them
to build I'D their own cash reserves,
instead OF increasing loans TO
needy industries, home owners, or
farmers.
Formation OF the committee,
headed by owen d. Young. followed
demands IN many sections of the
country for speeding up the credit
expansion program, for drastic
means of boosting prices, for speedy
distribution of piled-up idle funds
in New York, and criticism that
financial leaders we're taking care
of the big fellows" only.
Helps Little Fellows
While members of the committee
of twelve would not comment on their
plans, because they were not COM
plete, 1t was indicated that credit
for building and loan societies and
farm loan banks would be arranged.
This would care for the little fell
lows" not reached by the larger
metropolitan banks
Criticism. in which at least one
candidate for presidential nomi-
nation participated, had been di-
rected at federal efforts to help
these small farmers and home own
ers, and smaller industries in the
rural districts.
The Reconstruction Finance Cor
poration, it was claimed. was help
ing only the financial interests and
large industries.
The criticism was denied by bank
ers, who pointed to the fact that
most loans to banks had been made
to banks in rural communities, not
to banks in New York and Chicago.
However, 1t developed. the banks
in the smaller communities, fearing
runs, had built up their cash re-
serves with the new funds, instead
Of relending them to borrowers.
Banks Refuse TO Loosen Up
The federal reserve system then
stepped into the picture with an at
tempt to remedy the situation. It
bought government securities in the
open market. This released cash to
banks, giving the banks still another
large sum with which they could ex-
tend credit to small industries and
small borrowers.
Still the banks failed to expand
their credit facilities, figures quoted
indicated. And now, IL is indicated,
the large bankers themselves have
formed their committee to CO.
ordinate efforts of the Reconstruct
ton Finance Corporation and fed
eral reserve system to help the
small borrower the credit expansion
plans were intended to help.
In the past twelve weeks, it was
explained, the federal reserve had
purchased in the open market S725,-
100000 in govrnment securities. This
released that amount in cash to
banks for lending purposes. And
that cash, too, would have been the
basis for seven and quarter billion
in credit.
But the bankers boarded their
funds in New York. Chicago banks
alone had at one time last week
more than S125.O00,000 on deposit
here, yielding less than one-half Of
one per cent interest.
Good Borrowers Scarce
New York bankers claim good
borrowers" are scarce, as they deal
only with large corporations. There
fore, it is probable that much OF
this cash concentrated here will be
diverted by the newly formed COM
mittee into channels where the
little borrower may get it.
Members of the committee are:
Owen D. Young, General Electric
Company, chairman; Mortimer N.
Bucker, New York Trust Company;
Floyd L. Carlisle, Consolidated Gas
Co.; Walter S. Clifford, American
Telephone and Telegraph Co.;
Charles E. Mitchell, National City
Bank; William c. Potter, Guaranty
Trust Co.; Jackson z. Reynolds,
Firts National Bank; Alfred p.
Sloan Jr., General Motors: Walter
G. Teagle, Standard Oil Co, New
Jersey; A. A. Tilney, Bankers Trust
Co.; Albert H. Wiggin, Chase Ma
tional Bank; Clarence NJ. Woolley.