Evening star., 1934-12-31

Renewal Of old charges that the
Government is partly responsible for
lack of adequate borrowing facilities
for industries is the chief result of
the report of two Treasury experts,
Dr.. Jacob Viner and Charles o. Hardy,
who studied the subject for Secretary
Morgenthau. The committee found
that there is "a genuine unsatisfied
demand for credit On the part of
solvent borrowers, large enough to be
a significant factor. in reJarding busi-
ness recovery" The resulting debate
raises numerous questions as to Gov
ernment policies.
1.-The need continues to be for more
confidence, rather than for more
credit" says the Philadelphia Eve
ming Bulletin, while the New York
Sun declares that business still sees
question marks dancing before its
eyes," and that business may be per-
suaded to borrow more, to assume new
bank loans, to invest in new ma
chinery or construction on an effective
scale when some of its questions are
answered definitely by the admins
tration."
1t is explained by the Kansas City
Star that ''the controversial problem
of long term credit to industry in
wolves comparatively small loans for
capital purposes-loans that cannot
conveniently or economically be
financed through the issue Of Securi-
ties" The Star concludes: while
the investigators find the unsatisfled
demand for credit is considerably
smaller than is generally believed
they believe the Government must
continue to lend to industry until the
banks loosen up or until a new inter-
mediate credit system is set up-pre-
sumably through the r. F. C. or pri-
vately. The question is of great i'm
portance. While there may be no
great demand for this long term credit
under existing conditions. possible
borrowers may be deferred because
they do not like the idea of borrowing
on Short-term notes that may be
called. In any event, the report in
vites attention to deficiency in the
banking system that ought to be
remedied.''
AS the investigation was conducted
largely in the Chicago district, the
Milwaukee Journal points to the fact
that bank deposits in that district
increased $888,000,000 in the first
eight months of 1884, but loans fell
on SGT ,000, ,000." The journal thinks
this is not a healthy thing" and
adds: "This is a concrete illustra-
ton of what Jesse H. Jones, head of
the Reconstruction Finance Corp, has
repeatedly charged, that the banks
sre not making industrial loans. The
answer is the same which the banks
have just as repeatedly given, that
the Federal examiners were clamping
down on them. marking sound loans
SLOW thereby virtually forcing banks
to liquidate them or write them of.
But the Viner report suggests that
Jesse Jones own r. F. c. has not
been doing any better about easing
up on credit. Ordinarily we should
call it hopeful that a Government
agency Is not inclined to 60 ahead
pouring out money faster than 1t can
see its way. Yet the report consid-
erably rebukes Mr.. Jones' constant
complaint about commercial banks.
DR.. Viner makes recommendations to
the Treasury. An important one is
that banks be encouraged to make
sound loans for six months and renew
them. A corollary is that bank exam
liners abandon the classification of
loans as SLOW, criticizing them ad-