Evening star., 1934-06-12
NEW YORK BANKER
HOLDS L!QU|D|TY
CARRIED TOO FAR
R. {. Jones Tells A. |. B.
Convention Hybrid Bank
ing Is Real III.
REASON FOR PESSIMISM
GONE, SAYS F. M. LAW
City Manager Plan to Be Debated
by Texas and California
Teams Tonight.

placed on the matter of llquldlty
Raymond E. Jones. vice president OF
the Bankers Manhattan Co., New
York City, declared today at the
thirty-second annual convention OF
the American Institute of Banking.
Reaction of his audience indicated
plainly many we're present who dis
agreed with this view.
LAS a practical banker who is
trying to help in period of stress,
l am frank to say that in my opinion
the question of liquidity has been car
ried to an absurdity," Jones asserted
He called liquidity a ''shibboleth'
and answered in the negative to his
own question:
Need We worry great deal about
liquidity when we are paying a pre-
MUM to insure the bulk of our de-
positS-and especially all the small
deposits, which in the past were the
cause of runs on bankS?"
Urges Long Term Issues.
Citing the tendency of banks to
take short-term Government bonds
with an almost negligible yield, he
said:
1T is true that money rates on
private loans are exceedingly low, but
they are not so low that bank must
get rid of its depositors' funds with
out any yield or, what is even worse
TO pay premium to get rid of the
responsibility. To my way of think
ing, all this is caused by an insane
desire to stay too liquid"
He suggested that bankers forget
about short-term Government obliga-
tions. which pay nothing, or relatively
nothing, and get "bullish on long
term Government bonds, which are
just as good and which are just as
liquid, provided a good market is
maintained for them by the Govern
ment."
Bank examiners were urged to take
broad view in considering loans, in
order to facilitate extension of credit
The real disease which underlies
the ills of the Nations banks is "a
hybrid banking system" he concluded
Approximately 1900 delegates were
present when the first business ses-
sion of the convention got under
way this morning in the National
Theater. The principal address OF
that meeting was delivered by Fran
els Marion Law of Houston. Tex,
president of the American Bankers
Association.
He painted picture of banking
and business generally emerging
from the depression.
There is no good reason for pes
simism today" he said. The de-
preston is by no means over, but
we are coming out of it. Banking
is a necessary business and will en-
dure. In order to endure, it must
be the right sort of banking, un-
der the right sort of management -
He warned the delegates that ''it
is fatal to be obsessed with the be-
lief that any and all change from
the existing order is heresy."
Service vs.. Gain.
He defended American bankers
against the charge that they are
reactionary and said that their prin-
cipal objective should be to serve
the public rather than gain great
riches.
DR.. Francis P. Gaines, president OF
Washington & Lee University, empha-
sized the necessity for sound per.
sonal character in a successful busi-
ness.
In the world of affairs the success
ful man, barring the lightning play o1
luck, is the man who takes advantage
OF hfeS high moments to formulate
his program and who then develops
character sufficient to sustain infal-
Of
He said honesty should be empha-
sized above all other traits in the
world of business.
Melvin c. Hazen, chairman of the
Board of District Commissioners
greeted the delegates, and Charles F
Ellery, vice president of the Institute
who will be its next president, re-
Sponded.
Activities Reviewed.
Albert S. Puelicher, Milwaukee
Wis, president of the Institute, made
his annual address reviewing the or
ganization's activities during the
year.
Reports we're heard from Richard
w. Hill, national secretary, and DR.
Harold Stonier, national education di-
rector. The invocation was made by
Rev. Forney Hutchinson, pastor of the
Mount Vernon Place Methodist Epis-
copal Church South.
Eight departmental conferences were
held by the delegates this afternoon
Addressing the bank administration
section, Hugh L. Clary, vice president
of the Operating Committee, Bank OF
America National Trust & Savings
Association. San Francisco, said bank
ing leadership in the future will be
largely matter of legislative leader
ship and the sooner bankers recognize
this fact the better. He urged that
first place IN plans be given to seek
ing favorable legislation
The underlying tendency in banking
laws in this country he said, is to re-
strict banks in their lending activities
and at the same time to increase lend
ing activities of the Government.
Debate Tonight.
L. A. Chambliss, assistant vice pres
ident of the Fidelity Union Trust Co
Newark, N. j., expressed the opinion
that the banks of America should
concentrate on strengthening the
hand of the Federal Reserve System.
He spoke before the business develop
ment and advertising conference.
C. c. Armf1eld, Winston Salem,
N. c., said that analysis of accounts
must be based on the actual cost to
the individual banks on which the
account is carried.
A debate between two picked teams
will be held tonight on the question.
Resolved. that the city manager
plan of government should be adopted
by all American municipalities of
over $4,000 population"
A team representing the San An
tonic, Tex, chapter will take the
affirmative of the question, with the
Los Angeles, Calf, chapter taking the