The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1934-10-19

Banking and other financial interests
of the country are apparently quite
disturbed over the
Ftn0ncrers trend toward easier
Disturbed bank examinations
Mr.. Roosevelt lately
has told the treasury that the bank
examiners were too hardboiled in going
over loans held In portfolios of banks
and that he was anxious to see more
uniform system developed than the ex-
aiming methods long in use.
The fear seems to be that the bank
examiners will relax too far in grant.
ing approval for loans outstanding
Heretofore, banks have had to toe the
mark and any questionable papers OF
any loan that gave evidence Of not be
ing liquidated In accordance with its
terms was promptly called to the atten.
structions to make corrective adjust.
ments on the books If, as some finan
cial authorities expect, bank examin-
ers become too lenient 1t is suggested
| in many quarters that the banks again
may find themselves with paper upon
CURED at the beginning Of this depres.
sion. 1t was bad loans that forced the
closing of many banks.
Then, too, many observers are find.
ing 1t difficult to reconcile the Presi-
dents attitude with the frequent criti.
cisms he has made Of banking prac.
tees heretofore employed. I am re.
minded also of the singing rebukes
that have come from the senate com.
mittee on banking and currency after
its investigation of the banking struc.
| ture. Time after time that commit.
tee, which proceeded with it's investi
cation with blessing from the White
House, has attacked banks and bank.
ers because of bad loans and worse
Judgment in dealing with the borrow.
ers. The question has been asked sew.
eral times lately whether banks are
| going to be willing to make loans that
are in some respects a gamble even
under the Presidents urge If, later
they will be subjected to attacks In the
halls of congress.
On the bank loans the President Is
convinced that bank examiners have
been throwing out q
examiners lot Of loans that are
Too Stringent perfectly good. They
have been forcing
the banks to charge off this paper as
a loss. In other words, Mr.. Roosevelt
believes that under the old rules of ex.
animation a too stringent attitude was
adopted by the administrative authori.
ties in the treasury and the bank ex-
aminers carried out those rules lit
orally.
In the background, it is to be remem-
bered, however, there is the federal
deposit insurance corporation. This
agency guarantees that the depositors
will be repaid in full up to limit of
$1,000 on each account. 1t would seem
to be that the existence of this insur-
ance corporation ought to fend off any
particular fear. But bankers know
and good many of the political and
administrative leaders recognize that
the corporation could not withstand
wholesale bank failures. It draws its
funds from assessment of member
banks and, therefore, when its present
reserves are exhausted banks must dig
up more. Following this line of rea.
soning, one cannot help arriving at the
conclusion that series of bank fail
ures, resulting from bad loans, would
throw more of a burden upon the
good banks than they can carry Thus
it Is made to appear that a high per-
centage of bankers in the country after
all are going to continue to exercise
their judgment on the type of loans
they make and will not be influenced
materially by administration wishes
Some, of course, will extend credit
with abandon, and it is this group
Of bankers who eventually will wit
ness the deposit insurance corporation
paying Off their depositors.
Consumers must look to a change in
their diet as regards some items OF
food during the coming winter, accord.
ing to statement from the Depart
ment of Agriculture. Through the Blu.
reau of agricultural economics the de
partment said that it expected some In
creases in prices between now and the
end of the year but that the climb in
price levels likely would be more grad.
mol opd NOT CO 10 rro hoe aoo,,r,,5
In the last three months. This fact, il
appeared, was traceable to the short.
age of some kinds of food resulting
from the drouth In the central states
and superabundance Of some other
kinds produced In the eastern half and
far western sections of the United
| States.
The department suggested that the
| full effect of the drouth on retail food
prices will not be felt until next
spring. AT that time, supplies OF
meats, dairy products and poultry
products will have been reduced. Moth
ing in the present situation, according
to the announcement, indicates a rea-
son for any substantial Increase next
spring because, by that time, conditions
will have begun to adjust themselves
The departments investigations in.
Dictated that fewer eggs will be pro-
duced this winter and the supply OF
poultry was expected to be the small
est in ten years. The market supply
of fruits this fall, however, and for
that matter during the winter and
,, spring months, will be only about :
per cent less than in 1888.
The combined SuppIv Of vorafahIoS