Coulee City dispatch. [volume] (Coulee City, Wash.) 19??-19??, 1934-04-13
BANK LOANS AND
BUSINESS RECOVERY
Official Describes Efforts of Re.
serve Banks to Bring Out
Deserving Borrowers
Present Situation
Typical

Apropos OF the part that an expan-
sion Of business loans by banks occu-
pies In the early stages of the business
recovery which is now gaining head
way, a Federal Reserve Bank official
recently gave an interesting review of
the experiences Of his institution in
this connection. In 1892 the Federal
Reserve Banks were empowered by
law to make direct loans to individuals
In unusual circumstances when they
had been unable to obtain loans from
commercial bank, he pointed out.
From the middle of 1892 to the end
OF 1888 there were 1886 applicants for
loans at the New York Federal Reserve
Bank under this law. The great major
lily Of these applications proved on ex-
animation to be for funds for capital
purposes, which are properly supplied
as an investment in the business. or
else were mortgage loans or others un.
classifiable as commercial.
Only Fourteen Qualify
sOnly $50, or less than 20 per cent,
were Of the type which merited de.
tailed investigation. The amount in
VOWED was $9.525,O00. After further
study Of These, Che Federal Reserve
Bank was forced to turn down the an.
plications of 238. finally Offering credit
In the sum Of $1.417.0OO to ID prospec.
tive borrowers. OF this amount, only
SS06,O00 was actually loaned, more than
one-half Of which was still outstanding
many months later. Two Of the borrow.
,ers went into receivership.
Since 1t was the special endeavor
OF the Federal Reserve Bank to make
every possible loan under the emer.
gency provisions of the amendment,
and since their best efforts resulted in
the extension of so small sum as to
have no effect on the total volume of
commercial loans, it is reasonable as
sumption that eligible borrowers en-.
titled to bank credit are being provided
for by the commercial banks" says the
American Bankers Association Journal
in commenting on this episode.
1t is characteristic, as shown by
yirile and alive. The most cheering fact
Of the present situation is the knowl.
edge that banks are in strong position
Recovery, even to the most pessi.
m1stic, Is no longer myth or rumor,
nor is 1t merely psychological. Album.
dant evidence and proof lie on every
hand-tangible proof. With return Of
rnnfdnnno fhn vfyh0n1c hor +
round and great many we'll managed
businesses may look for profit during
this calendar year with fair assurance
at least. For what has been achieved
let us thank the President, who has
labored with courage and patience and
vision. Let us thank the Congress,
whose members during the emergency
have put the public welfare above par
tfsanship. Let us thank one hundred
twenty-five million of our own citizens
who have refused to be stampeded, but
rather who have kept alive the divine
spark of faith and hope.
Cause for Confidence
1--WE may reasonably expect that the
recent action of the government in sta.
bilizing the dollar will have a marked
tendency to encourage Industrial and
other business commitments. Business
men need not be so exclusively engaged
In t. ling counsel Of their fears now
that uncertainty does not haunt them
Much has been said about the loos.
ing Of credit by banks. During the acute
period Of the depression banks for the
most part have not been lending nor
-,s 49, y. t,----I yI-;11.