Washington, Augusi 27.—One of
the things which the President is
expected to call on Congress to
straighten out next winter is the
matter of control of banking and
credits.
Ultimately, many folk here be
lieve, the Government will become
the sole primary source of credit.
All the indications point that way.
At present, however, there are three
separate institutions dealing with
the banks and each exercising some
Bort of control over credit. And
those three are pulling in different
directions.
There is the Reconstruction Pi
nance Corporation, the Treasury
and the Federal Reserve Bank sys
tem. The first two are Govern
mental departments, the last osten
sibly a private institution, but un
der close Government supervision
and control.
The RFC not only has lent a few
billion dollars to banks, but it is
now, under a law passed at the last
session of Congress, making loans
to private industries. All of those
loans are amply secured. Indeed,
the RFC—which is, incidentally,
one great Governmental agency
which was established under the
preceding administration—is the
source to which almost all sound
business enterprises of any size are
turning for working capital. There
is no doubt in the mind of anybody
that these loans will ultimately all
be paid back, with interest.
RFC and the Banks - •
The RFC has invested a great
deal of Federal money in the, pre
ferred stock of many banks all , over
the country. The theory of this is
not only that weak banks needed
this strengthening but that, being a
large stockholder, the Government
would thus be entitled to a seat on
the board of directors, and so keep
watch that no depositors' money
was lent for speculative purposes.
The Administration believes, and
rightly, that a large part of our fi
nancial difficulties have arisen from
too easy credit for purely specula
tive purposes. But it was definitely
the intent that this additional bank
capital, provided by the RFC, should
be used to enable banks to make
legitimate loans to business and in-
Tailoring Dress Making
All Kinds of Sewing
Mrs. C. W. Laffoon
West Main St. Elkin, N. C.
DR. C. E. NICKS
VETBRLNARY SURGEON
Phone 240
Church St. ißlkin, N. O.
WANTS
We pay cash for all produce—Egfs,
chickens, hams, butter, dried fruit
and peach seed. See us before
you sell. Brendle Produce Co. tfc
Wanted—4oo pounds of good sound
butter each week. Sant Holcomb.
tfc.
Anyone interested in taking Business
courses, bookkeeping, typewriting
and penmanship, meet me at
Jonesville school building Monday
night at 7.30 o'clock. Lessons will
be given at night only.—L. F.
Hicks. lt-c
For Rent—7 room house furnished,
suitable for one or two families.
Call Tribune office for informa
tion. lt-c
CIVIL SERVICE POSITIONS—For
the latest information regarding
the position in which you are most
interested, write F. P. Stimson,
Representative, P. O. Box 2042,
Winston-Salem, N. C. 8-30
Bring me your chickens and eggs
and get cash for them. Sant Hol
comb. tfc
REAL ESTATE
Here is your Yadkin county farm yon
have been asking about. 208 acres,
9-room house, two 10x30 feet
screened porches, two open porches
about same size. Feed barn and
other outbuildings. 150 acres
fenced with 3 strands barbed wire.
20 to 30 acres in a section. 150,
000 feet of oak, pine and poplar
timber (probably more) ready for
the market. Fine tobacco, wheat
and corn lands. 15 acres fine creek
bottom land that does not over
flow. 30 to 40 acres in grass
ready to make hay now. 3$ miles
of Yadkinville, two miles from No.
60 highway, 1% -mile of church
and school. Price $3,500. SI,OOO
cash, 10 years on balance.
V. C. MARTIN and W. S. REICH
Office in Casstevens Hardware
4 Ml. StOW
dustry; in other words, to loosen up
bank credit.
That would have been all right if
it had not been for the directly op
posite view on credits taken by the
Comptroller of the Currency's of
fice. That branch of the Treasury
is charged with the periodical ex
amination of all national banks. In
instance after instance, when banks
which have sold preferred stock to
the RFC have used the proceeds in
loans of unquestionable soundness,
bank examiners have called their
directors together and "bawled them
out" for making such loans.
At Cross-Purposes
Instructions from Washington to
bank examiners are to compel ev
ery bank to call in every dollar of
outstanding loans not secured by
good collateral or made against fi
nancial statements which indicate
many times the value of the loan.
And in the case of debtors of long
standing who have been unable to
do much more than pay their in
terest on bank loans, 'the Comp
troller's office is inclined to insist
upon banks suing the delinquent
borrowers and obtaining judgments
so that if at any time within twen
ty years, the poor fellow does get
hold of anything, the bank can take
it over.
In other words, while the Admin
istration and the RFC are aiming
for a reasonable inflation of credit,
or at least toward loosening up, the
Comptroller's office is still working
on a policy of deflation which, if
pursued to its logical end, would
mean pretty nearly general bank
ruptcy.
The answer to this apparent para
dox is that the Comptroller's office
is still under the control of the
same group which have been run
ning it for years, through many ad
ministrations.
Out of this situation has arisen
the idea, which is beginning to gain
adherents here, that the Comp
troller's office should be entirely de
tached from the Treasury and its
Junctions delegated to some other
body, perhaps the Federal Reserve
Board. To do that would necessi
tate new banking legislation, en
larging the Federal Reserve's pow
ers; but that is not impossible.
A National Central Bank
What some of the clearest finan
cial thinkers believe should be
done, though that does not mean
that it will be done, is to consoli
date the RFC and the Federal Re
serve, put all banks , under their
jurisdiction and let the Government
do all of its banking functions
through what would be, in effect a
great national central bank. That
is the way in which nearly every
other nation in the world operates.
Government itself does not engage
in banking, banking does not at
tempt to exercise governmental
functions. Treasury and central
bank cooperate, the bank's function
being to keep its finger on the pulse
of business and industry and to
float governmental bond issues or
provide financing for the govern
ment in other ways.
Something of the sort will cer
tanly be discussed next winter when
Congress again meets. How far it
will get will depend upon many
things, including the Administra
tion's strength in the next Con
gress. That is still the future, but
with little doubt here of a safe
working majority on the Democrat
ic side.
Short Crop Growers
May Sell Others' Excess
Growers of flue-cured tobacco In
North Carolina who have signed ad
justment contracts with the govern
ment and whose production in 1934
is less than their allotment, may, if
they care to do so, sell the flue
cured tobacco grown by other con
tracting growers whose production
exceeds their allotment.
"This administrative ruling was
signed by Secretary Wallace last
week," says E. Y. Floyd of State Col
lege, In charge of the tobacco pro
gram in this State. "The decision
was made when it was learned that
in some sections, the production will
be well below the quantity of tobacco
allotted. Reports as to crop condi
tions from all sections indicate that
the total production of contracting
growers will be approximately 50 mil
lion pounds below 80 per cent of the
base production which will be the
quantity allotted to contracting
growers and is the quantity for which
tax-payment warrants could be is
sued. The most recent estimate of
the crop is 526 million pounds."
Mr. Floyd points out any arrange
ments made between contracting
growers to utilize allotment cards
other than their own for selling to
bacco is purely a private transaction.
Contracting growers who produce In
excess of their allotment will not be
permitted to market this excess to
baccco and pay the tax provided un
der the Kerr-Smith Tobacco Control
Act but may arrange to sett this to
bacco under another contracting
grower's allotment card.
The non-cbntraqtlng growers, un
like contracting producers, may sell
tobacco produced in excess of any
allotment given them, if. they pay the
tax of 25 percent of the market val
ue as provided In the Kerr-Smith
Aot. They will not, however, be per
mitted to sell tobacco under the
marketing card of a contracting
grower, Floyd says,
Read Tribune Advertisements!
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Radio Program—WSOC 11:45 A. M. Wed.
SOUTHERN PUBIJC UTIUTIES CO.
■■■■■BH PHONE 210
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Thursday, August 30, 1934