Evening star., 1951-06-08
Powell Praises
Bankers Aid or
Credit Curbs
Federal Reserve Sees
Results of Efforts,
Official Tells Group
By DonoId B. HodIey
Star Sfoff CoYFespondent

backing given the program by
bankers and other lenders.
However, he told the District
Bankers Association, in conven-
ton at the Homestead here, that
much of the work so far has
been organizational and educa-
tional and that plenty remains to
be done, in view of prospects for
increasing inflationary pressure
on the national economy in COM
ing months
Mr.. Powell urged the bank
ers to talk to business customers
individually.
Get their ear before they walk
in with their plans all made and
ask for a loan," he said. 'It is
much easier for them to fit their
plans to the anti-inf1ation pro-
gram when their seasonal and
sother decisions are being discus
sed in board meetings. of among
executives, than after plans are
complete and the owner or treas
urer starts out to arrange f1nanc-
ing"
Explain the Program First.
Another suggestion: First ex-
plain this program to your direc-
tors and keep them informed as
to how it is affecting your own
bank and community. Your di-
rectors are men of affairs in your
city, and their explanations in
their circle of acquaintenances
will save you much strain and
possible loss of customers.
Follow the advice of the Amer
lean Bankers Association anc
send copies of the Voluntary
Credit Restraint Program to youl
commercial customers. A few
days ago, President Shelton o1
the ABA wrote to all banks ask.
ing that this be done. The re-
sponse has been tremendous.
"In the first five days mail we
received requests from SGT banks
for 57,059 copies of the program,
Mr.. Powell said. He congratu-
lated the bankers on their efforts
to acquaint customers and the
public with the programs pur-
poses.
Response Floods Office.
"An amazing flood of advertise.
ments by clearing houses, resolu'
tions by bankers associations, re-
ports of interviews with bankers
public addresses and radio talks
is pouring into my office"
The program has not been ir
operation very long and two i'm
portant restraining influences
came to bear at the same time. he
added.
1.-THE top-heavy retail inventor!
situation" he said, "began to b'
apparent with the dropoff in re
tail sales before Easter, and th'
March and April declines in tn
Government and corporate bont
markets exerted a chilling inf1u
ence on credit expansion.
However. deem it somethlnl
more than coincidence that tn
sharp counter-seasonal weekly IN
creas, in commercial and indus
trial loans at reporting membe
banks ceased with the week o
March 81.
1.-THE request by the Fedora
Reserve Board to all lending In
stitutions to cooperate in tn
program was issued on March 8
and the national committees frs
bulletin dealing with inventor,
loans was issued on March 20.
sThe more detailed figures nov
available reveal that defense loan
are rising, and loans to carry ray
materials are falling. However
loans to carry retail inventorie
continue to climb.
Gap to Be Larger. ~
Referring to inflationary pres
sures, Mr.. Powell said the ga
between goods for civilian con
sumption and the supply of pur
chasing power promises to be eve
larger as the months go on.
"Within a year we are likely t
see a million fewer employees en-
gagged in making civilian goods,
he said. 1.-THE amount Of ra'
materials available for civilia
goods production will be probabl
less next year than today becaus
of defense requirements. Alread
ALLEGATIONS and restrictions
many strategic materials hay
been announced.
"Yet with full employment
counting as employees those pre-
ducing civilian goods. the worker
in defense Industries and peop
in military service, the nations
income might be as much as 81
billion above current levels"
The Treasury's plan for exter
sion of maturing e bonds deserve
the fullest support, and banke'
can help by informing custome
of the advantages offered by tt
plan, John A. Reilly, president
the Second National Bank, to-
the convention. Mr.. Reilly W;
chairman of the District War F
nance Committee for the thir
fourth and fifth war loan drive
The owner Of maturing E bont
now has three options. He me-
cash them for face value, he me-
hold them for an optional intel
est-bearing extension, or he ms
exchange them in amounts
$500 or multiples for current il
come Defense Bonds, Series c
Mr.. Reilly pointed out.
1.-THE Government and the ban
have spent a lot of time al
money in the last decade educa
ing individuals to save system
atically," Mr.. Reilly said. "Tho
who have kept their inveStme
for 10 years have learned how
save. Their thrift has been Il
backbone of Americas progres.
Constantine Brown, column