The Barnwell people-sentinel. (Barnwell, S.C.) 1925-current, July 27, 1933, Image 3
Banker Describes the Way Loans and Securities of Banks
Are Based on the Hopes and Plans of All
Classes—Values Dependent on Public’s
Ability to Meet Obligations
P. H. SISSON
By FRANCIS
President American Banker*
C REDIT may be informally described
as future hopes, plans and good in
tentions converted into present pur
chasing power. The
farmer, the manu
facturer, the mer
chant, the home
buyer, the p u r-
chaser of household
goods, the investor
and the speculator
all borrow at times.
They p»an to repay
with the earnings
of their crops, pro
ceeds of the sales of
their goods, in
comes from their
wages and salaries
or profits from the resales of their
securities at enhanced market values,
each as the case may be.
The greater part of these various
forms of credit is obtained by the bor
rowers directly or indirectly through
the expansion of the loans and invest
ments of the banks. It is this which
creates the notes, securities and mort
gages in the portfolios of the banks.
The banks are able to extend these
loans because a great many people de
posit money with them.
Even under the best conditions the
plans of a sfnall percentage of borrow
ers go wrong through mistakes, bard
luck or dishonesty, and the Judgment
of the banker in such cases is proved
by the after event to have been at fault.
The losses caused under such condi
tions are ordinarily fully met by funds
set aside out of the earnings of the
banks for just this purpose and do not
affect the money of the depositors, who
seldom hear anything about such
losses.
In the vast majority of cases ana in
the overwhelming volume of business
Involved the confidence of the bankers
in their customers snd the confidence
of the customers In their own ability
to carry out their plans and obligations
to successful conclusions are wholly
justified This Is th« normal economic
situation and It constitutes the condi
tions under which the u*e of credit
adds to public welfare and progress.
The Faith of the Banks
Such was the structure of hopes, good
Intentions and common confidence in
one another that egi/ted among all
classes of the nation's community life
when the series of economic shocks
began to shake the nation's social fab
ric In 192S. The people had deposited
billions of dollars with ths banks be
cause they bad confidence in them. The
banks bad loaned large volumee of
these deposits on farm and home mort
gages and on notes cf manufacturers.
busioe*s men nod flounce concerns, and
»had Invested in tb« standard securi
ties of the nation's corporations, stats
snd local governmental units and the
national government Itself, because
they bad confidence la the dtisenship
and business condition of the nation.
Their mortgage sad other loans to
owners of farms aggregated lf.50o.000,-
000. Loans on urban real estate were
M .OOO.OOO.OOO. Loans to individuals se
cured by U. S. Government, municipal
and corporate securities totalled 911.-
000.90o.oo0. Loans to Industrial and
commercial enterprises In connection
with the production and distribution of
the nation’s infinite varieties of goods
amounted to almost 119.500.000.000.
Investments in Federal. State and mu
nicipal bonds were almost 9f.000.000,-
000. and in various kinds of railroad
and corporate securities 911.000.000.000.
These made total loans and Invest
ments of 95S.000.000,000.
This great credit structure was built
while the country was at peace, while
the farms and factories sere produc
tive, while the nation and the world
provided great active markets for their
outputs, while the earnings of all kinds
of enterprise were large, while the
H. SISSON,
Association in Tkt Forum
working people of the nation were
fully employed, while wages and sal
aries were steady and generous, while
prices of commodities were strong and
while the minds of the people were
dominated by faith In the future and
confidence In one another.
Great Changes Came to the Nation
Then suddenly, almost as it the sun
itself had lost part of its vitality,
everything changed. Foreign markets
failed and disappeared. Industry slack
ened. A rapid drop in all kinds of com
modity values set in. The earnings of
business fell. Unemployment devel
oped. Wages and salaries went down.
Domestic markets shVank. Fear be
came general. The securities markets
became panic-riddei as the prices of
stocks and bonds withered to fractions
of their former values. It was the
greatest disintegration of human
plans, economic conditions and worldly
values That history bad ever witnessed.
These destructive changes cut right
through the qualities and values of the
loans and investments, the notes and
securities in the banks. Business men
and manufacturers could not repay
their notes to the banks as due. Many
governmental units and corporations
defaulted the payments on their bonds.
Property underlylnt real estate mort
gages became worth less than the face
of the mortgagea The market values
of standard securities became less
than the banks bid paid for them as in
vestments or accepted them at as col
lateral for customers* loans.
This meant. In fine, that the ability
of borrowers to carry out the future
hopes, plans and good Intentions that
1 have defined above as the basis of
credit bad become Impaired to a far
greater extent that had ever before oc
curred fh tbs nation'* history. The re
sulting losses could not be absorbed by
the banks alone out of the normally
ample funds that had been set aside
sgslnst the expectancy of a certain In
evitable percentage of human plans
gone wrong.
Banks Showed All Reasonable Car*
It was In loans and Investments,
whose values thus became so unfore-
eeeebly Impaired, that the .hanks. In all
confidence. In all good faith. In all
humanly reasonable care and good
judgment had entrusted the htttlone of
dollars of deposits which their cus
tomers had entrusted to them.
Those loons and investments were
under all normal conditions, as good ss
gold Itself. Indeed. If the banka In
stead had filled their vaults with gold
bars, and then tom* unknown cosmic
ray had transmuted them Into lead, the
rciuits would bav* been scarcely more
startling than the depreciation that
was caused Id the aaaets of the banks
by the unforeseeable economic forces
which permeated and debated them.
The Inevitable result was that, when
the banks urgently needed the money
they had entrusted to those assets, so
that they could meet the unreasoning
demands of their depositors, they could
not get It back.
It was not that our banking system
and methods wars of themselves weak
or reprehensible, apart from the rest
of the Ilfs jf the nation, ss has so much
been made to appear.
It was not that onr banks were per
meated with inconipetency or dis
honesty or with lower standards of
business ethics than were the other
forms of human activity with which
their own fate ami activities were in
extricably interwoven, as. It almost
seemed at times* there was a concerted
national conspiracy to lead our people
to believe.
The great fact'df American banking
Is that it shared fully in the plans and
hopes and hazards of the American peo
ple.—and when these plans went
wrong, the banks carried their share
of the burden and suffered their chare
of the misfortune.
IN ANSWER TO A LADY'S LETTER
A lady writes to say that she does not understand why an 8-cylinder
ear does .not cost more to run than a car with fewer cylinders. She
refers to my statement that our Ford V-8 develops more power on a gallon
of gas than any car we have made. 'a
The use of 8-cylinders does not mean the addition of two or four ■
extra fuel consumers. It is not. for example, a 4-cylinder engine
multiplied by two. Our 8-cylinder engine takes the fuel supply of an
ordinary 4-cylinder engine and divides it eight ways. And why?
By reducing four larger explosions into eight smaller ones, we get
engine smoothness and quietness. Eight-cylinders indicate the wajr the
gas is used, not the amount. It is just the difference between going
upstairs in four long jumps or in eight ordinary steps.
Two things use up gas—bad engine design and useless car weight.
Besides having an engine that gets a high percentage of power out of the
fuel, the Ford V-8 has a light, strong body and chassis so that no power
is wasted in moving excess weight. , %
The only extravagance about the n v .w Ford V-8 engine is in the building
of it. The extravagance is ours—the economy is yours.
The whole question of car economy needs clearing up. An economical
car gives economy all round. Price, operation, upkeep, all play their
part. If what you save on gas you lose elsewhere, that is not economy.
As to upkeep, our dealers say that in recent years the Improved
quality of Ford cars has cut down-their repair business 50 per cent.
As to price with quality.—judge for yourself.
As to economy, here is the record of a stock oar three weeks out of
shop in Oklahoma:
On a run of 10,054 miles at the rate of 1,000 miles a day—th *
V-8 gave 18.8 miles per gallon of gas. Not a drop of water was added
to the radiator. The oil was changed once in 1.000 Biles.
That should answer a lot of questions.
July 24th. 1933
FARM ACCOUNTING
CONTEST LAUNCHED
Bankers Evolve Plan for Stim
ulating Important Aid to
Farm Success
T'HE Cache county, Utah, bankers re-
^ cently added a stimulus to banker-
farmer cooperative work by launching
a farm accounting contest. At a meeting
of the Clearing House Association the
project was put before the bankers, and
methods and plans formulated.
Each bank in the county agreed to
enroll a minimum of five farmers in
the farm accounting project. The
names of the farmers when enrolled
will be sent to the Secretary of the
Clearing House, and also to the Ex
tension Division cf the Utah State
Agricultural College. The bankers
sgree to cooperate and keep in close
touch with each farmer they enroll so
as to Insure the completion of s maxi
mum number. The bank which auc-
ceeds at the conclusion of the contest
In enrolling the largest number of
farmers completing the project will be
given a special recognition at the an
nual meeting.
The banks of Cacffe county have
agreed to subscribe to an award fund,
which will be presented to five winners
as follows: first prize, 935.00; second
prize, $25.00; third prize, 920.00; fourth
prize, 912.50; fifth prize, 97.50.
Recognition (or Good Farming
In addition to the cash prizes, every
farmer customer enrolled, who scores
sixty per cent or more, will be awarded
a special certificate issued by the
Clearing House Association and the Ex
tension Service jointly in cooperation
with the Agricultural Committee of the
Utah Bankers Association.
The scoring will be done on the fol
lowing basis:
Farm and home account records
(accurate and complete) ....50%
Success of year’s operations as
brought out in the summary of
the year’s business 23%
General appearance of farm ami
Improvements and condition of
livestock and poultry, (judging
to be done during tbe summer
months) 25%
The contest will end December SI,
1933. The judges will be the County
Agent, the County Key Banker, a rep
resentative of the Clearing House As
sociation. and two representatives se
lected by tbe Extension Division of
the College.
SAVE YOUR EYES
By Dr. W« Iter F. K mball
Mist.uri Strte B<-ato of Opt.metiy
SHADING BABY'S EYES.
The eyes of infants are muth n.
a* native than these of adults and for
the first few days of life they are ex*
tifinely ftensitive. The no Of nplete de*
ve! pnient at this time of the pro-
tec'ing tissues cf the eyes, the eye-
brew., eye-lashes, and the pale, thin
lid** lender has protect on than is
possible by a Suits. The eyes of
meny animals ate* protected at birth
fion r oo str ng light until the pro
tecting membranes have acquired a
good start-
e
In the first few weeks of life the
eyes of the baby shou.d at all times
be sheltered from bright or dazzling
illumination, remembering that in
fants, uni ke adult?, cannot protect
themselves by changing the position
cf their heads or by reaching up to
null down the window shade or tilt a
lamp shade. Too often the infant is
placed near a window in full light of
day and sometimes even with direct
sinlight shining in its face. This should
never be permitted; the resulting ef
fect of ail that light is a handicap they
will carry threugh life. Nor should
we go to the eppeste extreme by
covering the face so as to hinder the
access of ftesh air nor of keeping the
room dark, as this renders the eyes
over-sensitive.
Impure air, the presence of dirt,
dust, smoke or foulness and the pres
ence of dirty cloths all affect the
eyes cf iniants injuriously. The caie
given the eyes oi an infant influences
hrs position i life, hi$ choice of pro-
fesson or trade; limit* his accomplish
ments. Certainly all parents are in
terested in giving the sons and daugh-
teis thd best possible equipment for
living. Tbe eyes are a vital part of
such equipment.
Give infant eyes intelligent care.
Se
v*n
ty-foor
bottl
e* of liquot
| Ol
2nd
n Owe
M* h.
u*e and a (
Kip
c *
as locati
ed in
a pes patch
F:
ank
Owen*,
. Sr.,
and t.aude
wt
ali>o prt
sent
•t the time
rft
id.
but F:
ank.
Jr., claim*
*1*
nntl
bility f<
ar th'
t possession
«•
u«»r
and w
a* pi
a«ed under
bt
IV1|£
Uter
reieai
se^ under
f Th*
I re-1
TO LOSE FAT
»»T Sac
1*1 to
bond.
1300, '
TO IMS
Choosing Bloodhound Pngs
* "The most Important thing to con
sider In developing a reliable man-
tralllng hlyodliound." says an author
ity In the Washington Star. M ls first
to secure well bred pups fmm parents
that are known to be dependable trail
er* No person following horse racing
would attempt to develop a racer out
of a Percheron or other heavy breed,
but would choose a trim built animal
that was a descendant from the racing
type. Although they are all horses
they have been bred for years for an
entirely different purpose, one for
speed, the other fq£ strength. Condi
tions similar to this exist with the
bloodhounds. It Is impossible to make
an expert man trailer from every
bloodhound just because he happens
to be of that particular breed of
hound.
Smw foe Turn tetoS m mm?
*•« Ml? ErawS— •Mv«r(4 «■
<■** u. isas*.
TO IMS tot SAFWLT sad RAJUfUaW-
LT. ui« » Salt Uaisooeful a* Keuacbea
Sails la a slaas ar bo* waior la tbs
morning boforo brasSfasI 4—1 Bias a
m ora la#—a bottle (bat lasts « masks
costs but s tftSo get Kruse ben Salts at
any dragsters la Awsrlrs. It as* Joy
fully Mtunsd aXtoc tbs first botUs
VARICOSE VEINS.
Healed By New Method
We oporadaao aor laJartUtna.
lo stalls bora* treat-
■aont pormtis yea to go aboat year
yea ar* already ao disabled as to be
confined to year bed. la that ca*d
Emerald OU acts ao aaicbly to b«A
year leg soroa, reduce any .welting
and and all yata. that yea are a* and
about again la an than. Just follow
tbs simple dtrectloao and you are aura
to be hel
.Iped. Y<
druggist
yea are.
Sheriff Makes Raid.
Sheiiff J. B. Morris and his deputy,
Giimote S. Harley, made a raid in
tbe Olar section of tbe county Satur
day, aa a result of which they ar
rested Frank* Owens, Jr, on a charge
of violating the prohibition law.
Airplane Taras Easier
Whether or not the automobile or
the airplane Is the easier vehicle to
operate is a question to which there
may be no final answer, but there Is
one maneuver which an airplane
makes more readily. Ask any pilot
and he will tell you that he much pre
fers to turn in an airplane than in a
motor car. While the latter will take
a curve easily if the highway happens
to be banked .suitably, the aircraft
does Its own banking. The greater
the speed the greater degree of bank
ing to be obtained simply by moving
the stick. It is much safer and easier
than when the vehicle Is dependent
upon something exterior to itself as,
of course, the automobile Is.—Los An
geles Times,
Water Fowl, in Death Valley
Death Valley, Cali?., may lose Its
reputation as the driest spot in the
United States unless ornithologists
quit their maraudings. For years.
Death Valley has enjoyed its name as
the most uninhabitable of places. Then
science stepped in for an Investigation
and emerged with the in/ormation that
78 species of birds. and water fowl
thrive therein. The wild life ranges
from ducks and geese to the osprey
and burrowing owL Death Valley is
300 feet below sea level.
• It Begins Monday, July 31st
The Most Important Furniture Event at
White* In Many, Many Years—
White’s August 1933
FURNITURE SALE
Of super-importance because we’re prepared to save money-—
,
much money—for dlir customers,Tn the face of a rising market!
Furniture Prices Have Already Advanced
IS to 40 Per Cent
Yet prices in this sale are st.H at depression levels. This ap
plies to our entire stork, including special purchases of thous
ands of dollars worth cf new funiture secured for this sale at
before-the-rise-prices. _
Convenient Household Club Terms ,
* e •
—if desired, and White’s prepays purchases amounting to $5.00
or more, to R. R. points within 200 miles.
Yen'll Look Back On The Purchases You Make In White’s 193T
Sale as The Greatest Investments The Family Ever Made For
- • . i
The Home!
J.B.
AUGUSTA,
&CO.
GEORGIA.
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