The Waterbury Democrat., 1932-06-21

Detroit, Mich, June 21.--Chal- longing American business to put an end to the billions of dollars of economic waste in this country annually, Henry H. Heimann, exe- cutive manager of the National As- sociation of Credit Men yesterday afternoon opened the 37th annual convention of the association by pointing out to the 1000 credit ex- ecutive assembled here from the entire country, that the country's fraud loss was four times greater than the sum of the net incomes of the 1,5O0 biggest industrial. utility and railroad companies of the nation.
 The net income of these com panies in 1891. the credit chief stated, dropped to less than $2,- 900, 100000 from the 1929 total of $4,500, 900, but fraud losses to the staggering sum of $7,500.- 100000 in 1881.
 If we could save even a small proportion of the vast wastes that are poured into the great Ameri- can ash can each year." MT Hei- mann emphasized, it would cas- ny 6Dch tho OCtWCCh prosperity and depression. It is a conservative estimate to attribute to traceabie facts billions of dol lars in economic wastes in this country annually. Our annual fire losses reach the staggering sum of $500, 100000. It is estimated that the financial loss through frauds approximatcs $3,86O, 100000. Of this sum, over $1,0O0, 100000 is ac- counted for by tax and insurance frauds. Credit frauds, without taking into consideration bankrupt cy liabilities, exceeds $400,000, 900. The bankruptcy losses of this country reach the tremendous to- tai of $1,000,000,000 annually. and at least 25 per cent of these losses are recoverable. Bankruptcy is largely a commercial credit prob lem and the National Association of Credit Men Is particularly con- cerned with it's administration"
 One of the primary reasons for our economic losses and the current depression was described by Mir Heimann as "the discounting of the individual" He had some praise to extend to the commercial credit | grantors of the nation. whom his 1 association represents.
 Commercial credit was for the | most part extended along reason able lines," he elaborated. This does not hold true relative to other types of credit. The utter lack | of confidence that has beset the l nation and that has taken it's toll | by way of discounting the indi- vidual, has been a. major contribu- tory factor to the present deplor- able situation. The moral risk of a man as such it seems in cer- tain fields has been wholly dis counted. All of the integrity. all of the character and all of the | given in the past seems to count | for naught.
 'It behooves every man to ask | whether after all this lack of hu- man confidence in this severe de- 1 pression has been due to the fact l that men have banked on colla- teral rather than character, on bal ance sheets, rather than balanced | judgment, upon mortgages rather . than human bonds. The world | drew no character report or a busi- | ness procedure report on Hatry, | Stinnes, Custris, Gualinos, Lowen- stein, Kreuger. or the Bank of the the United States, and it's people | are paying the penalty"
 Putting credit to work is the only | way to put business to work. the | credit head continued. explaining | that "in selecting "Working Credit | Means Working Men" as the key note theme of our convention pro- gram, I do not have in mind that putting credit to work means the imitation of credit It is not the lack, but the congealed condition of credit that is holding up the ship of commerce. There is suf- ficient credit available in the na- tion. It Is the lack of normal cir culation and velocity of credit that has prevented the resumption of normal buying. and consequently normal production activities. The proper distribution of credit through all economic channels is essential in developing return of confidence.'
 Legislation and panaceas put forward to create new credit fall wide of the mark. The credit Is terested in it's administration to see  employed. To have our economic
 storehouses filled with stagnant credit iS to add further to the cre- dit unemployment situation. Our solution does not lie in credit in- flation. We must not forget the indisputable fact that liquid credit means solid business."
 As a means to accelerate circu- lation of credit. Mir. Heimann ad- vocatcd greater use of the trade acceptance.
 "The Reconstruction Finance Corporation, the Class Steagall bill, and the open market operations of the Federal Reserve System, have given to banks a measure of much needed liquidity. Bankers, however. been severely criticized because they haven't passed on this liquid- ity to industry and business. One of the most important reasons be- hind the banks reluctance to pass this credit on to business has been the scarcity of good commer- cial paper. As the bond market is not conducive to investment, ex- | cept in very high grade issues, the
 bankers feel that to expand credit generally might result in their re- turn to a frozen condition.
 Tn an endeavor to make avail | able to the banks type of pa- per that would be very attractive and at the same time enable banks,
 through the purchase of such pa-
 per to indirectly pass on to busi- ] ness and industry the helpfulness