Show FINDS BANKS WILLING ERS CAUTIOUS Prominent Writer Refutes Statements Bankers Are Refusing Sound Loans Loans Loans- Describes Reasons for Reduced Reduced Re Re- Volume of Credit FIGURES F FIGURES supplied by typical well well- managed manag-e hanks In different parts of oC the count country show sho that a high proportion pro portion o or of all nil applications to for loans have ha been granted In the pas year or two says Albert W. W Atwood In a recent article in The Saturday Sat Evening Eve Ric 71 icing ning ing Post on The Thc ld Idle Ie Dollar Dolin r. r Ex Ear Excerpts from Mr Ir Atwoods Atwood's article follow fol Col low Frequently banks state slate that as high as 90 per cent of or all such applications arc granted and for tor fJ from om 60 to 75 per cent of oC the amount asked for Allowing that the bankets bankers make these figures as favorable 10 to their own case as possible it seems strange that we are arc told again and again that banks are arc not lending I If we take into account tb the whole class of ot regular bank borrowers the tIle plain fact Is very few Cew want to borrow bor bore row yet et For the word borrow borow Is merely another name for Cor th the word debt and we face a great worldwide worldwide world world- wide drive to get net out of debt An experienced small city banker asked It If banks were lending freel freely enough wisely replied The Thc really good borrower does not wish to 10 borrow borrow bor row now In fact 1 I think our cus ens customers are making a remarkably fine line showing In paying of off their loans especially loans of oC long stan stand ing inn The Shrinkage of 01 Credit CreditOr CreditOr CreditOr Or if U we think of business busine s concerns con cerns terns rather than of individuals Itis it itis Itis is conservative to say that thu those e able to maintain high credit ratings have been mostly the ones able to tn main maintain tain tamn ample cash resources and therefore therefore there fore tore least in need of credit As prices and costs fell many c concerns found themselves with plenty of cash because o of the In operations Cash re resources s were still further swollen h by reduced dividends divi lends and smaller smalle inventor made bank borrowings still less necessary Expressed in another n way banks cannot expand credit they cannot make loans unless there is a de de' demand demand mand for Cor the same Fundamentally the business transaction maces maes the loan the loan load docs tines not nut make malte the transaction It illi la is a mistake to in try to force upon business organ funds which they do du not need Under the circumstances the Iho Idle Idle rullar is a natural and antI proper propel enough h phe phenomenon A demand for Cor credit is die dlf I cult to create artificially and there theres s Is is always danger In so doing Banks must be liquid enough at atall atall I all times to pay depositors Tile The ide idea of ot a commercial loan Is that thai It represents represents rep rep- resents a self liquidating process prncess in is business If It the banker makr mak only those advances that are inherently sound and selects his maturities wisely he will have ha incoming funds fund I to meet demands Government Lending Lendin As As everybody e knows the Government Govern ment has rest v st lending agencies for Cor home owners farmers and th the like Ilke These have ha nothing nothing- to do with the subject of or this article except that all such Government operations would be impossible it II the banks did not lend the Government money moner for the purpose No No one can set a time when borrowing bor bore rowing will be resumed But it will come when men once more feel teel that conditions are sufficiently settled t t. t warrant them In taking chances IB ii entering upon deals and in tr trying to tomake tomake tomake make mone money Mr 11 Atwood says that it may b bhat be b. that hat the banks ave ae overcautious now just lust as they were overconfident nt 1 in I. 1929 but calls attention to the fact that until a little more than a year ago banks were failing partly because because because be be- cause they had loaned too freely Creely and were being criticized right and left leCt for precisely t that tt He adds Indeed the banks which had bad been cautious in their lend lending Ins policy came through the crisis safely Under Under Un der such conditions it Ilis is utterly use use- leas ess to criticize batiks banks for not noi making mak ing loans After the experience they had lad for tor several years ears especially ID in 1932 an and 1933 It Ilis is only natural that they should relax their requirements very slowly and gradually Unfortunately many of or the for tor loans are not from who want temporary banking accommodations for tor three or six and are arc quite able ahle to meet their maturity dates but are alc from those thoe who really need permanent capital They are busted busied and the they want someone someone someone some some- one to stake them t lo to a new start What they really seek is a artner to 0 furnish they ther with time long capi tal But depositors insist upon being paid ald on demand and therefore It ItIs Itis itis is a grave question whether banks should tie lie up their funds lunds for far any length of time |