Evening star., 1938-08-14

gropes along IS 1t
desires fire. M
quently clashing IA
with the purposes Yr.nk,yn w.ltman.
Of Others Not to
let your right hand know what your
left hand is doing seems to be New
Deal axiom.
This lack OF coordination among
the New Deal Misunderstanding to
widespread confusion on the part OF
business-is we'll illustrated by II. F. q.
Chairman Jesse Jones one-man cam
paign to have the banks Of the coun-
try loosen their purse-strings and be
more generous with loans.
BE Generous. Says Jones.
Mr.. Jones became quite bellicose
about it. He warned that II the banks
did not liberalize their lending policies,
IT. might become necessary for an ex-
tension OF governmental credit facili-
ties. He even went SO far as to sug-
gest that the banks use their de-
positors' money for loans now usually
made by finance companies with stock
holders money specifically put up for
that purpose.
The fact Of the matter Is that most
Of the country's bankers feel they have
been making all the sound loans pos
sible within the limits OF good bank
management. They are as anxious to
make money as any one else. but
they remember only too we'll that the
banks which pursued liberal and gen.
erous lending policies prior to the first
depression were among the banks
which did not reopen in 1888.
But that Is not the point at which
We are driving. The point is that after
Mr.. Jones harvested great deal OF
newspaper publicity by threatening the
banks for being too tight, the Federal
Deposit Insurance Corp. also New
Deal agency. warned the banks against
being too generous with loans.
Bank supervision is concerned pri-
marily with the protection Of de-
positors." said the F. D. I. c. "As in
any other type of business, bankers,
il they are to perform their function.
must be prepared to assume some risk.
But when these risks become excess
sive in terms OF the amount Of capi-
tai Of the bank or when a bank Is
otherwise mismanaged. it is the duty
of the bank supervisor to step In to
seek correction"
Be Cautious, Says Crowley.
Leo T. Crowley, chairman Of the F.
D. I. c., went on to point out that
loans and securities will be criticized
on the basis of Judgment as to the
ability Of the obligor or debtor to re-
pay the obligation.
And some people wonder why busi-
ness is confused and uncertain! In
this case the banker is in the dilemma
Of being told by Mr. Jones that II he
does not liberalize his judgment on
loans the Government will 60 into
competition with him-while Mr.
Crowley tells him that if he does and
any OF his loans go sour he will be
held to strict accountability.
But, OF course, the most significant
aspect Of this whole business was the
disclosure that the private bank in
Houston, Tex. which Mr.. Jones con-
trolls, has been more than usually eau
tious in its loan policy Banker Jones,
1t seems, does not entertain the same
idea about this matter as does r. r.
c. Chairman Jones.
The Jones bank in its June 30 state
ment revealed that its loans and dis
counts amount only to is per cent
Of its total assets. Recent figures for
the 500 Federal Reserve member banks
Of Texas disclosed that loans and dis
counts represent 20 per cent Of their
assets. while for the Nation the COM
parable figure is 20 per cent.
The Spirit Of the New Deal.
At recent press conference Mr..
Jones was requested to reconcile his
demands that the banks loosen up and
the cautious policy Of his own bank.
Il don't want people to do as do
but as tell them to do," the r. F. c.
chairman replied.
There. concisely and clearly. was
epitomized the spirit Of the New Deal,
not alone in this but in most matters.
Any one who shows an interest In
making q profit is assailed as greedy
by those in the New Deal who never
overlook q single opportunity for
private gain.
Much Is said about morality in pri-
vate and public life, yet the White
House secretarial offices are turned
over to young man whose income
comes chiefly from premiums on in
surance sold to corporations doing
business with the Federal Govern
ment
Worthless convention books are
autographed by the President and sold
to corporations-in large quantities to
some-for $3.50 each to supply the
party with funds. Federal workers are
shamelessly shaken down for the bene-
fit of the party war chest.
Il don't want people to do as do,
but as tell them to do"-those words
deserve to be painted across the New
| Nal hopnar