Evening star. [volume] (Washington, D.C.) 1854-1972, 1933-09-15

the fault Of the banks but OF the exam
inerS."
A statement by Controller O'Connor
to the bankers that their request for
postponement and perhaps abandon
ment Of deposit insurance was not ac-
teptable to the administration. is
quoted by the Rochester Times Union,
with the comment as to the present
needs: 1T is absolutely necessary to
establish confidence, not merely in banks
and groups of banks which have sue
cessfully weathered the storms of recent
years, but in the banking system as
whole. The banking system cannot
function properly, but must still keep .
large proportion Of its resources liquid.
until such confidence is established. Also
in many regions there Is a demand for
better protection for depositors. The
insurance provision represents the best
plan Congress was able to devise to
meet these demands"
There are hundreds Of thousands Of
depositors,' records the Oklahoma City
Times, who feel that radical depart
ure from old American banking methods
IS needed. The people have found out
that other nations, such as the United
Kingdom, France and Canada, manage
to conduct banking business without
@oA> AoAAAA CO, even Al PCA4Ooo VI 0CplCo-
sion. They earnestly desire such
changes as will give American deposl-
tors comparable safety for the funds
they entrust to bankers. II this insur-
ance plan isn't the way, it is up to the
bankers to offer q better plan"
THAT the banks are not functioning
freely" states the Charleston Evening
Post, lis true; that they are afflicted
with the 'liquidity complex is also true,
but, considering the experience through
which they have passed and the neces-
sity they are under to restore the conf
dencs Of the public, on whom they are
dependent for their resources in the
form Of deposits, their attitude is under
to make loans that are not sound is to
invite disaster. It should be possible.
nevertheless, to widen the channels OF
credit, but 1t must be done with great
caution and by close cooperation be-
tween the Government and the banks,
unless there Is to be complete revolu-
ton IN the whole theory of our COM
mercial banking, with the Government
full partner in the business
Thanks to the low money rates pre-
vailtng and thanks to the pressure Of
surplus funds" declares the New York
Herald Tribune, the banks are prob
ably as keenly on the alert today as at
any time In the past to make loans
where they can find good borrowers. 1t
Is little absurd, therefore, to picture
them as attempting to maintain them
selves in an unnecessarily liquid condi-
ton" The Philadelphia Evening Bull
letin comments: 1T Is wise and neces-
sary for the Government to provide the
banks with all the credit resources they
need for prudent financing of COM
mercial and industrial needs. 1t would
be unwise for it to insist upon an aban-
donment Of those sound practices to
which the American Bankers Associa-
ton resolution refers as an instrument
Of effective N. r. A. support. There is
no evidence at hand that the banks are
expected to adopt prodigal loan policy
and thus to misuse money borrowed
from either depositors or Federal agen-
cies; but 1t is just as well that the diff
ferences between Government and bank
credit capacity should be clearly de-
fined and understood"