Evening star., 1943-01-01


of the District of Columbia Bankers
Association are keenly aware of
their new responsibilities, as we'll as
their opportunity to be of service to
the Nation. To finance a global
war and at the same time keep the
economy from disintegrating is a
herculean task We, as bankers,
accept this challenge and the Amer
ican people may count upon our
best efforts during these critical
times.
1t has been estimated that the
Government will spend over $80,-
100000, 900 during the present fiscal
year. Taxes are expected to pro-
duce about one-fourth Of this sum,
which means that the balance must
be borrowed. This is a huge sum
OF money to raise within few
months. 1t must be skillfully han
died or the Nations economic power
will be greatly weakened
War Bond Buying Urged.
If imitation means, as I think it
does, an expansion of the media of
exchange more rapidly than the
commodities and services to be eX-
changed, then it is most important
that as many of these Government
bonds be sold to individuals and Or
CARNATIONS other than banks as
possible When depositors buy, their
bank balances are reduced to the
extent of their purchases. AS the
Government spends, the money finds
its way back into the banking sys-
tenn and the deposit structure re-
mains substantially intact.
If banks buy, deposits do not go
down, as the bank merely converts
other assets into Government Sc
curities. when the money is spent
1t has the effect of pumping brand
new deposits directly into the eco
nomy with inflationary results. Vic
tory Fund Committees have been
organized by the Federal Reserve
Banks to stimulate private purchas-
ing. Washington bankers are TAX
ing prominent part in the pro-
gram of the committee for the fifth
Federal Reserve district. -..--.. .-,.
Sales Reveal Increases.
The sale of War bonds and stamps
has increased substantially since the
outbreak Of war. During the year
our member banks have supervised
the sale and distribution of approxi-
mately two-thirds of the volume in
the Metropolitan Area of Washing
ton. We are studying at the present
time the proposed plans of the Gov
ernment to use the facilities of banks
for the purpose of clearing coupons
on rationed commodities
So many things spring from the
war effort that it is difficult, if not
impossible, to make an intelligent
forecast of the probable condition
of business for 1943. AS we come to
the close Of our first year as Nation
at. war, a few observations may be
in order. The magnitude of the
war effort and its impact on our
national economy has served to
obscure the vision of many business
leaders. 1t is well known that gloom,
uncertainty and fear are prevalent
in many business circles.
Some of our executives are con-
cerned about the status of their per-
sonal fortunes, about their busi-
nesses, and they shudder to think
of the welfare OF their loved ones
after the war is over. Such mental
state is poor equipment for post
war planning that will require
courage, resourcefulneSs, adaptable
ity and confidence. This planning
must begin now.
Changes Must Be Faced.
We can all perform a real service
to- the Nation if we can aid in re-
moving the prevailing mental de-
featism. The outlook may be clouded
but by no means forbidding. There
will be changes and We must empha-
size the Importance of frankly fac
ing the fact of change and getting
ourselves accustomed to it.
In the last analysis our boys are
dying for the preservation of our
way of life and our economy. AS
they serve on the fighting front we
must serve on the home front.
pledge, without reservation, the
time and talents of the banking
profession in the District of Column
bia to the end that our economy
will withstand the shock Of war and
provide real happiness for all when
the Axis powers are decisively
beaten.