Evening star., 1932-08-24
KEY MEN MAKE Up
BUSINESS PARLEY.
Conference Had Its Inception
3 Months Ago, But for a
Different Purpose.
BY MARK SULLIVAN.

The meeting of business leaders from
all over the country in Washington this
week had its inception some three
months ago when the depression was at
its lowest panic point. The purpose of
their coming together is very different
and auSpiciously happier than the con-
dition in which they were first organ
lied At that time. in April and May.
President Hoover brought about the
setting up in New York of committee
of busint men and bankers headed by
Owen d. Young.
The purpose of the group, stated
broadly. was first to achieve co-opera-
tive action by the banks in any emer-
gency that might arise, second to act
as a kind of liaison group between
banks and business men. In the condi-
ton of that time. now quite reversed
there was no telling what need might
arise for united action by the banks
of New York or of any other city.
1t is interesting to point out now
that the United States has come
through this crisis without resort to
clearing house certificates. These are
a device which IS sometimes substi-
tuted for currency at Il time when banks
cannot prudently let currency leave
their vaults.
Need Now Past
Last Winter and Spring preparations
were made III some cities SO clearing
house certificates could be put in use
promptly if need should arise. That
need is now. of course. completely past
The group set up in New York was
soon after duplicated in Chicago Later
,IAt.
the - Federal Reserve Districts. 1t is
these II groups, making upward of 100
men. who will now meet in Washing
ton. The recent function of each group
in its banking district has been to bring
about the normal lending of money by
the banks to businesses equipped to
make use of such funds fruitfully and
safely.
This need, like the early emergency
one is now practically over. There is
no longer any substantial need to
stimulate banks to lend. The position
of banks has been reversed since about
the middle of June.
At that time the heads and staffs of
many banks were in literal terror De-
probation of securities held by them
had gone so low as to make them un-
certain from day to day whether their
banks were inSolvent. Since it is a
crime for a bank official to continue
operating bank if he has conscious
knowledge it is not solvent their state
of mind can be imagined. All that is
now completely over.
The rise in the price Of bonds and
other securities to substantially normal
has made all bankers comfortable
Average banks are now in the position
Of having ample funds lying idle. The
normal thing to do with 1t is to loan
1t to business. and that 1t now under
way on scale which is increasing al
most sensationally.
Functions Now Different.
AS of the present, therefore, the
original functions for which these COM
mittees were set up in the II Federal
Reserve districts are no longer seriously
needed. The purposes for which they
will meet in Washington this week are
different and look to the future. The
meeting this week will compare the past
experiences of the several groups in
bringing about larger loaning by banks
Of credit to business. One of the groups,
the California one, has developed a
technique which has worked for the en-
largement of industry in that territory
be put at the service of the others. The
group will continue to facilitate in
creases Of credit to business By banks.
Another purpose will be to SO manage
through the remainder of the depreS-
sion as to spread employment as
evenly as possible among those needing
it. Stated in a large way, the separate
committees in the various Federal
Reserve districts will act so to speak,
as community centers having the func-
ton of serving the industrial and social
needs of their respective districts
I through the period until recovery is
complete.
The meeting will bring together more
than 100 men who are in way key
men in the business life of their reSpec-
tive communities. They have no inten-
ton of initiating anything new. The
need of them from now on is merely to
be helpful to the forces which, arising
spontaneously. are bringing the country
back toward recovery.
Copyright. 1922