Newspaper Page Text
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PAGE SIX
THE BUTLER HERALD, BUTLER, GEORGIA, JULY 20, 1933.
How All the People Played a Part
In Building Nation’s Credit Structure
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
By FRANCIS H. SISSON,
President American Banker! Association in The Forum
P. H. SISSON
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 pur
chaser of household
goods, the Investor
and the speculator
all borrow at times.
They plan 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 1>y the bor
rowers directly or Indirectly through
the expansion of the loans and invest
ments of the banks. It is this which
creates the noteB, 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 oonditlons the
plans of a small percentage of borrow
ers go wrong through mistakes, ,'Sard
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
ect 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 and In
the overwhelming volume of business
lnvolyed the confidence of the bankers
In their customers and the confidence
of the customers in their own ability
to carry out their plans and obligations''
to successful conclusions are wholly
jnstlfled. This is the normal economic
situation and it constitutes the condi
tions under which the use of credit
adds to public welfare and progress.
The Faith oi the Banks'
8uch was the structure of hopes, good
Intentions and common confidence in
one another that existed among all
classes of the nation's community llffe
when the series of economic shocks
began to shake the nation's-social fab
ric In 1920. The people fiad
billions of dollars with the bainks b^
cause they had confidence in them. The
banks bad loaned large volumes - of.
these deposits on farm and home mort
gages and on notes of manufacturers,
business men and finance concerns, and
had invested In the standard securl
ties of the nation's corporations, state
and local government units and the
national government Itself, because
they had confidence in the citizenship
and business condition of .the m
Their mortgage and other 1
owners of farms aggregated $0,600,00
000. Loans on urban real;estate ,w<
$4,000,000,000. Loans to Individual!
cured by U. S. Government, municipal
and corporate securities totalled $11,-
000,000,000. Loans to industrial and
commercial enterprises in connection
with the production and distribution of
the nation's infinite varltles of goods
amounted to almost $19,500,000,000.
Investments in Federal, State and mu
nicipal bonds were almost $6,000,000,-
BOO, and in various kinds of railroad
and corporate securities $11,000,000,000.
These made total loans and. invest
ments of $68,000,000,000. '
This great credit structure was built
while the country was at peace, while
the farms and factories were produc
tive. while the nation and the world
provided great active markets for their
outputs, while the earnings of all kinds
of enterprise were lartfe, while the
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 if the sun
-•••—- — ettort to meet requirements of the
itself had lost part of its vitality, government that have delayed the
SEYMOUR IS GIVEN
HIS OLD JOB BACK
AS ROAD ENGINEER
INTERESTING DEVELOPMENTS
IN HANDLING OF PEACHES
IS SHOWN BY H. D. POLLARD
SWIMMER DROWNS,
HANDS, FEET TIED
IN WAGER EFFORT
Atlanta, July 15.—E. N. Seymour,
office engineer of the state highway
department, and one of the five en
gineers removed by Governor Tal-
madge “for extravagance and in
efficiency,” hah been restored to his
former position in the , department,
It was disclosed Friday.
Mr. Seymour, as office engineer,
has approved the estimates and in
dorsed the checks sent to Georgia by
the United States Bureau of Good
Roads, and was understood that
he was restored to his position in an
effort to meet requirements of the
everything changed. Foreign markets
failed and dlsappea.ed. 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 shrank. Fear be
came general. The securities markets
became panic-ridden 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 hlrtory had ever witnessed.
These destructive changes cut right
through the qualities and values of the
loans and Investments, the noteB 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 underlying real estate mort
gages became worth less than the face
of the mortgages. The market values
of standard securities became less
than the banks had 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
have deHned above as the basis of
credit, had become Impaired to a far
greater extent than had ever before oc
curred In the nation's history. The re
sulting losses could not be absorbed by
.the banks alone out of the normally
ample' funds that had been set aside
against the expectancy of a certain in
evitable percentage of human plans
gone wrong.
Banka Showed All Reasonable Care
-It was in loans and investments,
whose values thus became so untore-
seeably impaired, that the banks, In all
confidence, In all good faith, In all
'humanly reasonable care and good
Judgment had entrusted the bllllonB of
dollar^ of deposits which their cus
tomers had entrusted to them.
Those loans and investments were,
under all normal conditions, as good as
gold itself. Indeed, if the banks In
stead had filled their vaults with gold
bars, and then some unknown cosmic
ray bad transmuted them into lead, the
results would have been scarcely more
startling than the depreciation that
dras caused in the assets of the banks
by the unforeseeable economic forces
which permeated and debased 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
demahds of their depositors, they could
not get it back.
It was not that our banking system
',attd methods were of themselves weak
or reprehensible, apart from the rest
ot.the life of the nation, as has so much
been made to appear.
, It’ was not that our banks were per-
nieated with incompetency or dis
honesty or with lower standards of
biVsiiiess ethics than were the .other
forms of human activity with which
their own fate and 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 of American banking
is that it shared fully in the plans and
hopeB and hazards oi the American peo
ple,—and when those plans went
wrong, the banks carried their share
of the burden and suffered their share
of the misfortune.
That Georgia peaches in solid cars
moved by express service to northern
1 markets is one yf the interesting as-
EFI'ORT TO OBTAIN FEDERAL j sertions of JI. D. Pollard, Receiver
HIGHWAY FUNDS FOR STATE and former President of the Central
INDICATED. | 0 f Georgia Railway, in a statement
published recently Mr. Pollard’s
statement discussed the handling of
the South’s summer crops by the
railroads, and he said:
“An unusual and interesting de
velopment in the handling of Georgia
peaches this year has been the move- |
ment of solid cars by express serv-
Express rates are nearly double
the rates by regular freight service.
Yet, in spite of this increase ip the
transportation charges, favorable
markets with good prices have made
it worth the buyer’s while ' to have
his cars shipped by express even at
the higher rates.”
Discussing the manner in which
railroads play their part m the
“efficient and orderly distribution of
the products of farm and orchard,”
Mr. Pollard said:
“Railroad trains, moving on regu
lar schedule and to fixed destinations
make it possible for the grower, the
buyer and the dealers to co-operate
to the best interest of all. No mar
ket gluts need occur when the major
portion of a crop moves to market by
railroad, for cars may be readily di
verted from a destination where
there is an abundance to some other
destination where there is a short
age. Federal and state agricultural
department surveys have testified as
to the stabilizing effect following
the orderly handling of shipments by
payment of $10,000,000 in federal aid
funds to this state,
Governor Talmadge and M. E.
Cox, state highway engineer, declin
ed to comment on the re-employment
of Mr. Seymour and Commissioner
J.P. Wilhoit yras out of the city Fri
day.
It is understood that the highway
department is making a special effort
at the* present time to satisfy federal
officials as to the present set-up in
Georgia, so that federal aid funds
will be sent to Georgia immediately.
There have been reports that
Governor Talmadge would appoint
two new members of the state high
way board as successors to Chair
man J. W. Barnett and Commission
er W. C. Vereen, to comply with the
federal requirement of a three-mnn
board. At present Commissioner Wil-
hit is conducting the affairs of the
highway department and the other
board members are fighting for their
jobs in Federal court.
Seymour was removed by the gov
ernor when he took charge of the
Waynesboro, Ga., July 13.—Rube
Morris bet friends he could swim
across Hatcher’s mill pond with his
hands and feet tied and died in the
attempt.
He was stricken with a heart at
tack half way across and sank be
fore those on the bank could reach
him. Several youths enrolled in the
Civilian Conservation corps dived
and recovered his body but efforts
at resuscitation failed. The coroner
attributed death to heart attack.
FRANKLIN TO INSTALL
WATER AND LlGHTs
Franklin, Ga^ July - 14
cent meeting of the City cL* a**'
was unanimously adopted to ) v*
the necessary steps to pmUna
With water an d electric
town is within one mile of th» r The
gift Power Company tranl^? r ' 1
line and has been unable to 'Z' S ™"
rent from them. The city fLZ'
piates getting their funds from
R. P. C. and refunding with ^ hi
issue. Some of the necessary inf" 4
mation has been furnished and t&
balance will be furnished in the lm
mediate future, to get the project^
operation at once. J 1 ln
highway department under * mart'll' rail as compared with the demoraliz
ing effects following ‘dumping’ of
shipments moving by -motor truck.
“Except for short hauls to nearby
markets the farmer must continue to
rely upon the railroad to handle ' the
bulk of his crop. That handling will
be performed with the maximum of
efficiency, economy and safety—and
where damage does occur the owner
-will be compensated for his loss.”
Summer Crops and the Railroads
law, and was marched out of the
building with Chairman Barnett, B.
P. McWhorter, state highway engi
neer; S. B. Slack, state bridge engi
neer, and L. B. Ackerman, Jr., bitu
minous engineer. H. J. Friedman, di
vision engineer at Waycross, was the
fifth engineer removed by the gov
ernor.
When Governor Talmadge be
gins his study of the ouster record
against the Public Service Commis
sion, he will have before him one of
the largestj stenographic files ever
compiled in a state case, approxi
mately a million words, it is said.
Testimony for more than three weeks
continuing from 10 o'clock a. m. to
6:30 p. m., has been recorded in de
tail. Some -night sessions were
thrown in. The transcript averages
60,000 words a day, it is stated.
FARM ACCOUNTING
CONTEST LAUNCHED
Bankers Evolve Plan for Stim
ulating Important Aid
to Farm Success
T IE Cache county, Utah, bankers re
cently added a stimulus to banker-
farmer cooperative work by -launching
a farm accounting contest. 1 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 ln
the farm accounting project. The
names of the farmers when enrolled
will be Bent to the Secretary of the
Clearing House, and also to the Ex-
’ tension Division oi the Utah State
'Agricultural College. The bankers
agree to cooperate and keep in close
touch with each farmer they enroll so
as to insure the completion of a maxi
mum number. The bank which- sue
ceeds at the conclusion of the conten
In enrolling the largest number ol
farmers completing the project will be
given a special recognition at the an
nual meeting.
Governor Talmadge has recom
mended Rayburn Clay, Atlanta bank
er, as one of three Georgians to
serve on a public works advisory
board for this state. The other two
members are to be recommended by
United States Senators Russell and
George. They have not announced
their selections.
With the summer crops of the South now moving to market
the importance of the railroads in the efficient and orderly distri
bution of the products of farm and orchard again becomes :
parent.
Railroad trains, moving on regular schedule and to fixed
destinations, make it possible for the grower, the buyer and the
dealers to co-operate to the best interest of all. No market gluts
need occur when the major portion of a crop moves to market by
railroad, for cars may be readily diverted from a destination where
there is an abundance to some other destination where there is a
shortage. Federal and state agricultural department surveys have
testified as to the stabilizing effects which the orderly handling of
shipments by rail has upon markets as compared with i the de
moralizing effects following “dumping” of shipments moving by
motor truck.
The movements of peaches and watermelons from the South by
railroad has been heavier than in recent years, and good prices have
been paid for these.
An unusual and interesting development in the handling of
Georgia peaches thk year has been the movement of solid cars by
express service. Express rates are nearly double the rates by regular
freight service. Yet, in spite of this increase in the transportation
charge, favorable markets with good prices have, made it worth the
buyer’s while to have his cars shipped by express even at the higher
rates.
Except for short hauls to nearby markets the farmer must
continue to rely upon the railroad to handle the bulk of his crop,
That handling will be performed with the maximum of efficiency,
economy and safety—and where damage does occur the owner will
be compensated for his loss.
Constructive criticism and suggestions are invited.
H. D. POLLARD, Receiver.
Savannah, Ga., July 18, 1933.
The banks of Cache county have
agreed to subscribe to an award fund
which will be presented to five winners
as follows: first prize, $36.00; second
prize. $26.00; third prize, $20.00; fourth
prize. $12.60; fifth prize, $7.60..
Recognition for 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 he done on the fol
lowing basts:
Farm and home account records
(accurate and complete) ... .60%
Success of year's operations as
brought out in the summary of
the year’s.business 25%
General appearance of farm and
Improvements and condition of
iivestock and poultry, (judging
to be done during the summer
months) 25%
The contest will end December 31,
.933, The judges will bo the County
\gent, the County Key Banker, a rep
resentative of the Clearing Housd As
sociation, and two representatives se
lected by the Extension Division of
the College.
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