Show FINE WILLING BORROWERS CAUTIOUS I 1 I 1 prominent writer write refutes statements Bani bankers ceis are I 1 refusing sound loans describes reasons for re deuced volume of credit F supplied by typical well i managed banks in different parts of 0 the country show that a high pro I 1 portion ot of all applications tor for loans 1 have been granted in the past year or two says albert W atwood in a recent article in the Sat saturday imlay 1 evening post on the idle dollar excerpts irom from mr air atwoods article follow frequently banks state that as high as 80 90 per cent of 0 all such applications are granted and for from 60 to 75 per cent of the amoun asked for allowing that tile the bankes banke s make these figures as favorable to their own case az as possible it seems strange that we are told again and again that banar aie not lending it if we take tahe into account the whole class of regular bank borrowers the plain tact fact is very few want to bori bori i row yet for the word borrow is merely another name for the word debt and we face a great worldwide drive to get out ot of debt an experienced small city banker asked it banks were lending freely enough wisely replied the really good borrower does not wish borrow now in fact I 1 think our customers are making a remarkably fine showing in paying off their loans especially loans of long standing the shrinkage of credit or it we ehlt k of business concerns rather than of individuals it Is conservative to say that those able to maintain high credit ratings have been mostly the ones able to 0 o maintain ample cash resources and therefore least in need of 0 credit As prices irice s a and edco costs ats fell many co concerns to bound ali effi selems wity with plenty or cash because of 0 the shrinkage in operations cash resources were still further swollen by i deuced divi bends and smaller inventories made bank borrowings still less necessary expressed in another way vay banks cannot expand credit they cannot make loans unless there is a demand for far the same fundamentally tile the business transaction makes the loan the loan does not make the I 1 transaction I 1 P Is i mistake to try to force upon business organizations funds tuns which they do not need under the circumstances the idle dollar is a natural and proper enough phenomenon no A demand tor for credit is difficult to create art artificially f bially and there is always danger in so doing danks banks must be liquid enough at all times to pay depositors the idea ot of a commercial loan Is that it represents a self liquidating process in business it if the banker makes only those advances that are inherently sound and selects his maturities Nv wisely isely he ha will have incoming funds to meet demands government lending As every everybody bodi knows the government has vast lending leading agencies tor for home owners farmers and the like these have nothing to do with the subject of this art article fele except that all such government operations would be impossible it the banks did not lend the government money for the purpose no one can set a time when borrowing will be resumed but it will come when men once more feel that conditions are sufficiently settled to warrant them in taking chances in entering upon deals and in trying to make money mr air atwood says that it may be that the banks are overcautious now just as they were vere overconfident in 1929 1029 but calls attention to the tact fact that until a I 1 tie more than a year ago banks were failing partly because they had loaned too freely and were being criticized right and left for precisely that ile he adds indeed the banks which ha had d been cautious in their lending policy came through the crisis safely under such conditions it Is utterly useless tj ti criticize banks for not making loans after the experience they had tor for several years especially in 1932 and 1933 it Is only natural that they should relax their requirements very slowly and gradually unfortunately many ol of the applications lor for loans are not from people who want temporary banking accommodations for three or six months and are quite able to meet their maturity dates but are from those who really need permanent capital they are busted and they want someone to stake atako them to a new start what they really seek is a partner to furnish them with longtime long time capital but depositors insist upon being paid on demand and therefore it is a grave qu question dwyier ller banks should tie up their funds tor for any length of time |