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THURSDAY, AUGUST 30, 1934 THE FRANKLIN PRESS and THE HIGHLANDS MACON IAN PAGE NINE LOOSENING OF CREDIT SOUGHT Administration Wants New Banking Con trol System (Special to The Press & Maconian) WASHINGTON, August 29.-One of the things which thfc 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 f with the banks and each exercising some sort of control over credit. And those three are pulling in dif ferent direction! There is the Reconstruction Fi nance corporation, the treasury and the Federal Reserve Bank system. The first two are governmental de partments, the last ostensibly a private institution, but under 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 en terprises 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 also has invested a great deal of Federal money in the preferred stock of many banks all over the country. The theory of this is not only that weak banks needed this strengthening but that, beinsr a larsie stockholder, the Gov ernment would thus be entitled to a seat on the board of directory and so keep watch that no depositors' money was lent for speculative pur poses. The Administration believes, and rightly, that a large part of our financial difficulties have arisen from too easy credit for purely speculative purposes. But it was definitely the intent that this ad ditional bank capital, provided by the RFC, should be used to enable banks to make legitimate -loans to business and industry; in other words, to loosen up bank credit. That would have been all right if it had not been for the directly opposite view on credits taken by the comptroller of the currency's office. That branch of the treas ury is charged with the periodical examination of all national banks. Tn 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 railed their directors together and "bawled them out" for making such loans. At Cross-Purposes Instructions from Washington to bank examiners are to compel every bank to call in every dollar of out standing loans. not secured by good collateral or made against financial 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 twenty years, the poor fellow does get hold of anything, the bank can take it over. In other words, while the Ad ministration and the RFC are aim ing 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 bankruptcy. 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 comptrol ler's office should be entirely de tached from the treasury and its functions 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 powd ers; but that "is not impossible. A National Central Bank What some of the clearest fi nancial thinkers believe should be done, though that does not mean that it will be done, is to consoli date he 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 func tion being to keep its finger on the pulse of business and industry and to float governmental bond is sues or provide financing for the government in other ways. Something of the sort will cer tainly be discussed next winter when Congress again meets. How far it will get will depend upon many things, including the admini stration's strength in the next con gress. That is still in the future, but with little doubt here of a safe working majority on the Democratic side. OPPORTUNITIES FOR GOOD FARMERS Applications are wanted from good farmers with large fami lies of children to fill vacancies in the rotating farm settlement at Rabun Gap-Nacoochee School. None hut the kind of farmers who are good citizens, who have their own work stock and farm implements, and who can take care of themselves after a term of five years, should apply. Families who have farms of their own to move back to, or who can become farm owners, will be given a chance to educate their children and improve their position as good farmers and citizens of a good community. Address A. J. RITCHIE, Rabun Gap, Ga. Quality Lumber - Low Price 'pHE new impetus in building that will shortly amount to almost a boom de mands that you place your orders for lum ber and building materials now, while prices are still low. And if you order lumber from us, you may be sure that you'll get quality lumber well-seasoned, best grain : lumber that will warp and check least of all. Phone 117. We'll be glad to estimate without obligation. s Franklin Hardware Co. FRANKLIN, N. C. Enjoy Your Labor Day Trip on New Goodyears Stopping to change tires in heavy traffic spoils a holiday not to mention the risk. Better put on new Gobdyears world's most popular tires then your car will be safely equipped also for the fall and winter to follow. Today's prices are low take ad vantage of them! Come in, let us fix you up all sizes all prices. Good Shoes Good shoes made, like new again when you bring them to pur shop for repair . . . We rebuild shoes at! very moderate prices. All work guaranteed. City Shoe Shop Charley Sutton, Mgr. FRANKLIN, N. C. GOODYEAR SPEEDWAY Thick tough Center-Traction tread Full Oversize Built with Supertwist Cord. 4.40-21 $95 4.75-19 $g.70 Prices subject to change with out notice. State tax, if any, additional. Sensational NEW ; 1 m 1 1 mm ee: wmmmm 1 GOODYEAR ALL-WEATHER See it! Let us explain why it actually delivers 43 More Miles of Real Non-Skid. Costs more to build but no more to buy! PUBLIC'S FIRST-CHOICE TIRES FOR 19 YEARS LOG CABIN MOTOR COMPANY TELEPHONE 114 J FRANKLIN, N. C. Shell Gasoline Reliable Repair Work GOODYEAR PATHFINDER New type Center-Traction tread with deep-cut blocks. Built with Supertwist. 4.50 - 21 $6.50 4,75 -19 $6.90 5.25 -18 $8.35 Prices subject to change without notice. State l tax, if any, additional. Gas Prices CUT Super - Shell 20c Gallon
The Franklin Press and the Highlands Maconian (Franklin, N.C.)
Standardized title groups preceding, succeeding, and alternate titles together.
Aug. 30, 1934, edition 1
9
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