Evening star., 1938-07-19
BANKERS WARNED
TO AID BUSINESS
R. F. c. Head Says Credit
Needs of Country Must
Be Met.
BY the Associated Press.

The morning mail brought to the
Nations bankers today a terse appeal
from the Reconstruction Finance Corp.
to lend more money to business.
Chairman Jesse H. Jones of the
R. F. c. wrote officials Of all State
and national banks that bank par
ticipation in r. F. c. loans to industry
was insufficient, and added:
IF banking is to remain in private
hands, it must meet the credit needs
Of the country"
He directed attention to the number
OF bills introduced in the last session
of Congress providing further extern
sion of Government credit to business.
There is still persistent talk about
the establishment of industrial banks
throughout the country" he said, "to
be at least partially owned by the
Government, to provide capital for
local private businesses.
you bankers know that with our
great abundance of banking resources
it should not be necessary for the
Government to lend to private in
dustry. You should also know that
the Government will be forced to lend
so long as there is substantial de-
mand for legitimate credit which is
not being met
$3.50, 100000 Declared Idle.
The Federal Reserve Board esti-
mates that banks have $3,150,000, 900
idle and lendable funds Commercial,
industrial and agricultural loans Of
banks in 101 leading cities increased
$5,000,000 in the week ending July
13, the board reported. The increase
is the second gain in three weeks, but
prior to that there had been de-
creases for 81 weeks.
From February to July IS, Mr..
Jones said, the r. F.. c. authorized
'2,001 business and industrial loans
totaling $85,344,788. Banks partici-
pated in only 302 of these loans, ag-
gregating $l1, ,483, ,444, a figure which
the r. F. c. head termed inadequate.
He sent all the banks a copy of the
controllers new regulations on invest
ment securities and the uniform ex-
animation procedure adopted by Fed
eral and some State banking agencies.
He termed the controllers regulations
"a convenient method for making time
loans in bond or serial form to business
and industry"
AN amortized loan is an INSTALL
ment loan," Mr.. Jones said. "If from
one to three years are required to pay
for an electric stove, a refrigerator, a
washing machine or an automobile, 10
years may be necessary to pay for the
plants that make them"
Finance Companies Cited.
Mr.. Jones called the bankers atten-
ton to the growth of finance COM
panies and cited comparative figures
to show their greater net profit than
that of banks. He said banks could
render such service as lower rates of
interest than finance companies and
at good profit to themselves.
He reminded bankers that banks
themselves are quick to notice" when
a business man lets his competitor
get ahead of him."
Mr.. Jones said he was not suggest
ing that banks make unsound loans.
but "in good business morals a bank
should not accept the deposit account
of business, however small, unless it
is willing to accord that business credit
accommodations reasonably within the
requirements of the business when
they can be safely extended, even
though it requires little extra trou-
BILE to do So"
The R. F. c. chairman charged that
entirely too many banks have not
realized changing credit requirements
and added that waiting for prospec-
tive borrowers, who are often reluc-
tant to apply for loans because of fear
they will be turned down, is not pre-
serving the banks pace in our ma
tional life"