The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1934-11-07

here, III part, Is WakSIlelQS dQ
lysis Of the situation:
1T is q custom of long stand
ing for commercial banks to make
credit commitments to industrial
and business concerns to be used
if and when desired. These are
what are commonly known as
lines Of credit. These lines Of
credit are definite expressions Of
the banks willingness to lend
money. The banks are eager to
develop the use Of such lines Of
credit because their principal
business Is to lend money.
1.-THE banks can make these funds
available. They cannot force
business to use them, but they
have for some time been making
unusual efforts, through direct
contacts with former borrowers,
to encourage such use. A great
volume Of credit, now readily
available at rates probably the
lowest in history, is at the dis
posal Of these who want it and
are properly entitled to use 1t.
I'm answer to an inquiry made
by this association, . group Of
banks with deposits Of about $l3.-
100000 900 representing over IS
per cent Of the commercial bank
ing deposits Of the country, re-
port total lines Of credit granted or
available at the present time Of
$6,155, 100000. OF these credit
commitments, the total Of loans
outstanding is $3.50. 900, 1000. In
other words, this group Of banks
has established lines Of credit
which are unused to the extent Of
roughly $4,000 100000, or an
amount equal to over 80 per cent
Of their total deposits. II these
figures are typical it may be esti-
mated that for all commercial
banks in the country the credit
commitments made and unused
probably aggregate something like
$4,000, 100000 or $4,000, 000. 900.
These credit commitments are
not confined to large industries,
but include thousands OF lines es-
tablished throughout the country
In favor Of small business units.
So far as We know, this Is the
first time these figures have p,cn
compiled.
THE fact Is that not only have
the banks made these commit
ments, but they are actually maxi
ing loans today In much larger
volume than Is generally sup
posed. The same inquiry that
asked banks for their lines Of
credit also requested q state
ment Of the amount OF new
loans other than renewals
granted during the first half Of
! this year. The banks answering
this question have deposits Of
about $4,000, DOC. 900, and they re-
ported new loans from Jan. I to
June 80. 1894. OF $3,s77. ooo. ooo, not
including loans against collateral
security. From these figures it.
Is obvious that the aggregate
amount Of loans now being made
by the banks Is very substantial.
The charge has been made
that the banks are not making
loans, because the aggregate vol
uue Of loans has not increased
materially on recent dates. The
principal reason Is that old loans
are being voluntarily paid off
about Is fast as new loans are
made. The turnover In loans Is
large. The borrowing individuals
and enterprises are changing from
day to day. Government dis
bursements Of funds In various
forms = one important factor
which has tended TO reduce bank
loans. Many persons who have
received government loans or
government payments. either d.
rectly or indirectly, have been
able to pay off loans previously
OVeAVAoSVSO ~ t4lC U61lkS.
There is much food for though
lere. Both as to the banking situs
ion and the effect on the nation
business Of the government spendtu
,rogram.
Impartial analysis discloses that, 1
5 usual. it Is not all good nor all ba,
The banks would like to aid In II
'overy and are attempting to do .
'ut business confidence is necessa,
before responsible people are willir
o borrow.
Perhaps, when the excitement an
Uncertainty attendant upon the ele.
ion quiet down the businessmen
he nation win take heart and begI
o move forward. Upon them, in Il
ast analysis. depends the success /
allure Of any economic or banki,
movement.