Worcester Democrat and the ledger-enterprise. (Pocomoke City, Md.) 1921-1953, 1934-09-28

can get what money 1t needs.
A Return of Normal Lending
Banks are badly needing loans for
revenue purposes. and now that conf
dence In banks has been largely re.
stored they are naturally returning to
a more normal lending policy. Before
the bank holiday the confidence Of the
people was shattered. The thought up
permost in the minds of depositors was
the safety Of their funds. Withdrawals
from banks became increasingly heavy
and general. Under such circumstances
the banker, mindful Of his primary re.
sponsibility to his depositors, was more
concerned in the collection OF loans
than In the making Of new loans. The
result was severe contraction of cred.
1t. For this the banker should not be
blamed. He simply performed his mani.
fest duty.
Bankers at this time are very prop
erly viewing the credit needs of bust.
ness with serious and sympathetic con.
| sideration. Applicants for loans are not
| always familiar with the rules govern
ing bank credit and constructive and
| interested help on the part of the bank
er will bring about the making of many
additional loans, without doing vio-
lence to any principle Of good banking.
Certainly no one would advocate the
making of unsound loans by banks. The
creation of large volume Of unsound
loans would not only weaken the banks
it would prolong the depression and
wipe out some of the gains already
made. It Is to be earnestly hoped that
no banker will yield under the pres.
sure OF his desire for earnings, or for
any other reason, and make loans Of
the wrong sort. John Ottley Of Atlanta,
in recent address, said-"The plan Of
lending freely and hoping for the best
has never proven wise."
There are many needs for credit of
kinds which are not within the province
Of commercial banks to meet. Likewise
there are many types Of credit, but
there are also many types Of credit ia
cilities vailable-enough, 1t would
seem, to meet the requirements Of all
classes Of worthy borrowers.
The Duty of Every Banker
1t is clearly the duty Of every bank
er in the country to perform certain
services. The most important are:
1. To afford perfect safety for de-
posts.
2. To grant credit to those who de-
serve 1t. 81
In tho ooaffar ~ oradifa tho nsihIfn
must In fairness remember that com.
mercial banks are not lending their
own money. but the money Of their de-
positors, represented very largely by
the earnings and savings Of the peo-
pie. The people who own these deposits
have accumulated them through years
of labor and sacrifice, and in many
cases the deposit represents their al.
These depositors have the right to call
for their money at any time, or at most
on short notice. Deposits constitute
sacred trust.
There are certain basic principles in
sound banking that must be held onto
even in this period Of change. but the
progressive banker must be responsive
to changing conditions and he must be
active in seeking proper opportunities
to meet the sound reeds Of his GUS
toners.
In a recent message to Congress, the
| President said-"I am greatly hoping
that repeated promises that private in.
vestment and private initiative to re-
lieve the government in the immediate
future Of much Of the burden which
1t has assumed will be fulfilled"
Repeated assurance has been given
by the Administration that there Is no
desire on its part to continue govern
ment lending a moment longer than Is
necessary and that at the earliest pos
sible time the government will gladly
give way to he banks and other lend.
ing institutions. This. of course, Is as
it should be and We are all earnestly
looking forward to thu time when pri.
vate initiative and enterprise shall have
recovered its vitality sufficiently to
throw government crutchee away.
Numerous bank failures have Gre
ated in the minds of many grossly ex'
aggerated idea as to the losses OF de-
positors in closed banks. The record
indicates that depositors in banks
which closed in he past three years
will realize on an average about 65c
on the dollar. That would mean loss
of $50. 1t has been estimated that dur
ing the depression the average value
Of investments in stocks lost about
900; bonds similarly declined approx
mately 500 and commodities $3.50.
Deposits in sound banks continued
to be worth 1000 throughout the de-
preston and 800 of the bank deposits
Of the country were not affected.
Bankers Deserve Confidence
The country can have full confidence
in the integrity and competence OF the
bankers Of the country. Out OF the les
| sons of the last few years has come
experience that will be valuable to the
| banker and to his community. He can
be counted on to show proper appre-