Evening star., 1934-10-25
Night Final Editisn
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Burying the Hatchet.

oul lHS LAC 1AdtCuCt'
II the bankers came to Washington
with bright and sharpened hatchet,
the spirit of their convention changed
1t from an instrument of war to a
symbol Of peace. A pleasant cere-
mony was completed last evening when
the President accepted the hatchet
In the spirit with which it was Of
fered and, in keeping with the tradi-
tional proprieties, buried it.
That was the tenor Of the Presi-
dents speech. The "old tallacious
notion of the bankers on the one
side and the Government on the other
as more or less equal and independent
units has passed away" Necessity, in
addition to being the mother of in
vention. also breeds leadership. The
necessities have made government the
leader, "the Judge of the conflicting
interests of all groups in the COM
munity, including bankers" This
leadership has been used, and will
continue to be used, in relation to
banks, to promote the confidence of
the people in the banks; to make the
confidence a real and living thing"
by assisting the banks to render their
useful and worthy services to the
people. And there is a third and
equally important goal of leadership
which the Government is now trying
to reach. 1t is to encourage the con
fidence of the banks in the people"
A few days ago Francis Marion Law,
the retiring president of the American
Bankers Association, suggested that
there is hardly sane banker in the
country who is not only willing, but
anxious to make good loans" The ex-
isting impediments to a more freely
flowing credit, he said, were not to be
found in the attitude of the banks,
but In the timidity of the borrower.
Last night the President devoted the
major part of his address to the de-
velopment of the thesis that, with
confidence of the people in their banks
restored, the essential thing now is
restoration of the confidence of the
banks in the people. In this he shared
the view of Jesse H. Jones, chairman
of the Reconstruction Finance Cor
poration, that the banks, more than
the borrowers, are to be blamed for
the delay in lending.
1t is reasonable to believe that q
state of mind which affiicts both
banker and borrower, denying to each
the confidence in what the immediate
future has in store for them, has de-
layed that free fiow of credit which
has been and remains one Of the chief
hopes of recovery. The President in
directly addressed himself to this state
of mind last night in discussing some
of the objectives of government now
in relation to banking. The vast
reservoirs of Government credit,
hastily constructed to supply the needs
which the banks could not extend, are
temporary. The Government expects
that as the banks will resume their
responsibility and take up the burden
that the Government has assumed
through its credit agencies" it is also
assumed that private business gen.
orally will be financed by the great
credit resources which the present
hquidity of the banks makes possible. +"
That is the basis for our traditional
system" and that is the system on
which the Government depends for
recovery.
In his references to the large relief
expenditures and to the objective of
q greater steadiness" in prices and
values through understandings with
other nations, the President took note of
two sources of criticism of his policies
and answered 1t, il not directly or
specifically, in a manner designed to
lessen the fears created by impassioned
statements of extremists. And his own
conception of the profit system will
be generally accepted.
The President was not, however, as
frank or as specific as he might have
been. There was considerable gen.
eralizing in his friendly speech. 1t is
one thing to tell a man there is no
basis for his lack of confidence, but
it is even better to show him and to
assure him beyond doubt that fears
of such things as imitation, continued
currency manipulation and Govern
ment borrowing, unbalanced budgets
and excessive taxation are in reality
groundlesS. The President did not go
as Ear as he might have gone.