| Show HOW THE BANKS AID THE GOVERNMENT NY Normal and and Emergency Needs Met by Advances of flanking Banking Credit I I I NEW N. N J. J The J.-The Th American commercial t banking hanking credit system U la an absolute essential inthe In Inthe Inthe the financial operations operation of or business and government Harold 0 O. Moulton President of the of or D O C. C said laid here recently In an address before the Graduate School of flanking Banking conducted con on conducted ducted under the Joint auspice of ot Rutgers flutters University and the American Amerl Ameri can Bankers Danke Association It H the flexibility and expansibility ity ItI provided by commercial bank banking Ing credit were eliminated ted Dr Moulton declared It Jt Is II scarcely too much to tolay say lay that the economic system Itself would shortly be destroyed Normally the amount of credit ut extended d by commercial banks lj to the government Is I. small In to amount and for the purpose mainly of ot loaning financing temporary requirements In to anticipation tion of tax J co collections or bond sales ulel Out but In periods of ot war and acute depression de do when the financial require require 1 meats ments of government expand with great rapidity the expansion of ot commercial com com- mercial bank credit Is la on a tremendous dour dous scale Such Is II the case ase at the present time lime t How I Public Need Needs Are Financed The purchase of o. government securities se by Individuals and by the commercial banks bank provides the government government gov with the means by which Its It manifold activities are arl financed The Treasury obtains tho the funds with which the Reconstruction Finance Corporation and other outer government credit agencies finance their opera Ollera lions through the sale lair of securities largely largel to commercial banks bank These Thele funds In turn have hate gone one to the as aI of ot distressed banks bank and end other financial Institutions to aid In In- Industrial and agricultural enterprises to finance new public pub and private capital construction and to provide relief to the unemployed Dr Moulton declared that It is I. not true that the world depression was fi caused by a breakdown of the American Amerl Ameri can banking system which did not ID In fact act occur until the depression had bad been heen under way for tor more then than three years years eor lIe He added Nor Is It true that the world maladjustments mal mat adjustments existing In 1929 can cnn be explained simply b by undue of ot commercial banking credit In la the preceding years elu These maladjustments mal mel adjustments Involved world agricultural tural Industrial commercial and financial relations |
