The midland journal. (Rising Sun, Md.) 1885-1947, 1934-07-20

eau get WnaC 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
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 BUSH
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 wCIld nc. on,y ". AIKEN the b2nks
it w"u!l p"o.o = : repression andl
wipe c.: SEINE CT TIE gins already
made. 1t is to be earnestly hopad that
no banker will yield under the press
sure of his desire for earnings. or for
any other reason, and make loans OF
the wrong sort. John Ottley Of Atlanta,
in a 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 fa-l
cilities vailable-enough, it would,
seem, to meet the requirements of all
classes of worthy borrowers.
The Duty of Every Banker
It 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,
posits.
2. To grant credit to those who de.
serve it.
In the matter of credits the public
must in fairness remember that COM
mercial banks are not lending their;
own money. but the money Of their de-
positors, represented very largely byi
the earnings and savings Of the peo-i
Pile. The eople who own these deposits
have accumulated them through years,
of labor and sacrifice, and In many
cases the deposit represents their all.
These depositors have the right to CALI
for their money at any time, or at most
on short notice. Deposits constitute al
sacred trust.
There are certain basic principles in
sound banking that must be held ontoi
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 needs Of his cus.i
toners.
In a recent message to Congress, the
President said-'T am greatly hoping
that repeated promises that private in-l
vestment and private initiative to re-
lieve the government in the immediatel
future of much of the burden which itl
has assumed will be fulfilled" 7
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 10
necessary and that at the earliest pos
sible time the government will gladly
give way to the banks and other lend. |
ing institutions. This, of course, Is az
it should be and we are all earnestly |.
looking forward to the time when pri- /
vate initiative and enterprise shall havel
recovered it's vitality sufficiently to
throw government clutches away.
Numerous bank failures have cree
ated in the minds Of many grossly ex. I
aggerated idea as to the losses of de-
positors in closed banks. The record
indicates that depositors In banks
which closed in the past three years
will realize on an average about 6sc
on the dollar. That would mean loss
of 35%. It has been estimated that DUR
ing the depression the average value
of investments in stocks lost about
90T; bonds similarly declined approx
mately 500 and commodities SEQ.
Deposits in sound banks continued
to be worth 1907 throughout the de-
preston and 900 of the bank deposits
of the country were not affected.
Bankers Deserve Confidence
The country can have full commence
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