Bankers Ponder Interest Kates
ATLANTIC CITY, Oct. 4.ÛÓBankers here during the seventy-eighth annual convention of the American Bankers Association were on the fence. They wanted to raise interest rates on the; loans to commercial customers. They felt the higher prices paid' for money by Secretary of the Treasury Snyder justified their doing so. Yet, they couldn't bring themselves to it.</br></br>The speeches they heard didnÛªt help them make up their minds, either. Secretary Snyder promised good business for the next 12 months or so.</br></br>But Comptroller of the Currency Preston Delano and Walter E. Hoadley, jr., economist of Armstrong Cork Co., uttered gentle warnings about a possible recession.</br></br>Ever since mid-August, New York bankers have felt interest rates ought to go up from 3% to Livingston 3'.åÈ% on commercial loans. They even upped the rale on brokersÛª loans from 2Vz% to 2*4%, but stopped there. | ThatÛªs another way of saying that bankers, like most people, are not sure of the business or inflation outlook. At the moment, business loans are expanding. Manufacturers, wholesalers, and retailers are financing their pre-Christmas inventories. But loans are not rising faster than they should at this : time of year.</br></br>If the bankers felt that loans would stay high after Christmas, they wouldn't hesitate to raise the rate. Then, the rate would hold. But if this is just a bulge, then theyÛªd only be penalizing a particular class of businessmenÛÓthose who come in to borrow now. That would be poor customer relations. Banking has become institutionalized. Interest rates donÛªt respond solely to temporary tightness or looseness in the money marketsÛÓas in the twenties.