Evening star., 1939-05-09
Hanes Finds Credit
More Than Meetinq
All Sound Needs
A. B. A. Official Coils
Borrower Most Welcome
Visitor in Bunks
BY EDWARD C. STONE.

BY EDWAkD T.. SIONE.
Robert M. Hanes of Winston
Salem, first vice president Of the
American Bankers Association and
soon to be advanced to the presi-
dency, declares that never has the
country had more ample credit
facilities than it has today, pro-
vided through many governmental
institutions, through, chartered
banks and through other financial
agencies. The facilities have been
streamlined as to terms. conditions
and rates to meet individual con-
ditions.
Mr. Hanes insists that all exist
Ing credit agencies are doing their
full part and that there is no need
of any new ones. In his recent
Chamber of Commerce address on
Adequacy of Present Financial
Agencies" he presented views Of
unusual interest to all bankers, as
we'll to those who charge that banks
are not doing all they can to grant
loans.
The most welcome visitor in a
bank today is a meritorious bor-
rover, he said. Not only has the
volume of loans declined; so have
the rates at which money can be
loaned. In the past 10 years in
terest rates on commercial loans in
the leading countries of the world
have declined 43 per cent and loans
have traditionally been the best and
chief earning assets of banks. If
there were normal demand for
loans this drop in rates would not
have occurred. If for no other
reason than their need for earnings
banks are seeking loans. Their
earnings requirements demand more
loans
Credit More Than Ample.
In a recent study made by the
American Bankers Association of
the practice of banks with respect
to the solicitation of loans, it was
indicated that 86 out of every 100
commercial banks are making def
mite efforts to stimulate loans:
that "a out of every 100 advertise
and 634 out of every 100 make
individual solicitations. The study
also indicated that only 3l.6 per
cent of the open lines of credit
offered by banks to customers is
being used Mr. Hanes said.
Last fall the National Industrial
Conference Board made study OF
the availability of bank credit from
the business point of view.
AS a result of this comprehensive
survey it was revealed that 91.2 per
cent of the companies replying had
experienced no bank credit problems
in the five-year period; 81 per cent
reported credit granted with GER
tain restrictions, and only 81 per
cent-or l in every 20-reported
any refusal of credit from 1888, at
the low point of the depression, to
1898.
Credit RefuSalS Explained.
OF those concerns reporting re-
fusal or restriction of bank credit,
one-third were already indebted to
some bank Also nearly one-third
of this group reported that since
the time of the original refusal or
restriction they had satisfied their
credit needs usually at some bank.
Unfavorable financial condition of
loan applicant was the reason given
for credit refusal in 33 per cent of
the cases.
The board also made a careful
study of banking statistics concern
ing banks that are members of the
Federal Reserve System, and found
that instead of reducing credit these
institutions actually increased their
loans classed as commercial by ST.
OO0.0O0,000 in 1886 and 1887.
Surveys prove very definitely that
what is needed or desired by those
claiming a dearth of bank credit,
is not credit. at least not in the
true sense of that term, but the
need, or wish, is for capital stake,
or perhaps a subsidy. Frequently
the demand is from concerns that
are desperately striving to escape
failure; they want something to
keep the outmoded or poorly
managed business struggling along
q little longer.
Agencies Doing Their Part.
Existing credit agencies are doing
their full part. Indeed, they are
geared to provide much greater
volume of credit than business will
use. In spite of their strenuous
efforts to stimulate the demand for
loans their lending facilities lack
much of being fully utilized. To
add new credit agencies would
operate only to increase the unused
facilities and take from the existing
agencies some of the customers they
now are serving.
The experience of the Federal Re-
serve banks and the Reconstruction
Finance Corp. demonstrates the
adequacy of existing agencies and
the futility of adding more.
Despite every effort on the part
of bankers to pour more credit into
the stream of business, the excess
funds continue to pile up. The
excess reserves of the Federal Re-
serve member banks recently
reached the staggering, record
breaking total of $4,O00,O00,0QO.
Certainly. with all that idle money
and with all the facilities for making
it quickly available, no reasonable
person could say that any legitimate
credit need is not being served, Mr.
Hanes concluded.
d. c. Insurance Mounts.
A total of $658, 8,2l6,0O0 ordinary
life insurance was in force in the
District of Columbia at the end OF
1888, an increase of approximately
S23, ABE, 900 or 81 per cent over 1887
according to the estimated annua.
figures released today by the Life
Insurance Sales Research Bureau
These figures are exclusive of group
and industrial insurance.
Ordinary life insurance in the
country as a whole increased ap:
proximately $1,000 900, 900 or 1.3 pei
cent in 1888, bringing the aggregate
to SIS, sos, ,209 900, exclusive of group
insurance.