The Washington times., 1911-04-09
and Dense Gloom on Old Wall Street Told in a Cheerful V

washington bankers, IN cOIiillioh WIN
the fraternity in general. have never
taken kindly to the guarantee OF de-
posits plan of banking. They Delieve
that II is an unjust tax on solvency
in the aid of the victims OF unWlse
banking. Even the banks in Oklahoma
are getting out from under this ex-
pensive luxury just as fast as possible.
Nearly 100 State banks are now seeking
naturalization, and the State banks
that are left are doing some worrying
and figuring on their own account
The State Bankers Association has
employed expert accountants and have
found that X cost the solvent institu-
tions s1,500,0o0 for the care Of the de-
positors of the insolvents for three
years. equal to tax of 100000 year.
No wonder they are running from un-
der.
Moreover, in liquidation of the assets
of delinquent banks the division of au-
lhority and bad management has caused
loss of much money and the State banks
are said to be in for another assess
ment. The failure of the Columbia
Trust Company in the fall of 1903 is
said to have "salted'' the State banks
about as much more has been expended
in standing under weak banks. The
failure on Thursday last of the Plant
ers and Mechanics Ban kof Oklahoma
adds fuel to the discussion, but it also
adds to the desire of other institutions
to get out Of the way of future disas-
ters OF like character.
No wonder that interest rates are
high in Oklahoma.
Capable bankers, faithfully guard
ing the money 1ntrusted to them, feel
that they ought not. to be made to
pay for the folly of careless or in
efficient banking-errors of judgment
In the matter of loans and will
full making away with the assets of
fiscal institutions. There are times
when bankers of the highest grade
Of efficiency and honesty find it nee
essary to join in extending the help
ing hand to other bankers in trouble,
as a matter of self-protection. Such
an instance developed in the suspen-
sion of the Walsh banks in Chicago.
and they have happened elsewhere in
order to hold up some bank tempor-
arily embarrassed. but rarely If ever
where the suspension would not have
been the occasion of causing serious
uneasiness among their own de-
positors. When a suspension is like
ly to cause no special uneasiness, the
bankers, as a rule, at least the Chi
cago and New York bankers, stand
from under and gather in the re-
mains.
When the depositor discovers that
safety should be the first and fore
most consideration, there will be
fewer failures.
The laws of the District of Columbia
prescribe a minimum capital of trust
companies doing business in the Dis
trict of s1,0O0,000.
There are five trust companies, with
an aggregate capital of SS,OOO,OO0, and
with a surplus and undivided profits of
over s.5oO,6OO.
Many of the trust companies of New
York city have a capital of $3.50, 900 to
$4,000 to S1.O00000 and some are capi-
talized for many millions.
There are few cities in Washington's
class that have anything like as strong
trust companies.
The Albany Trust Company, of Al
bany, has $40e,00O capital and 100000
surplus.
The largest trust company in Buffalo
has $780, 900 capital and $4,000 surplus.
Cincinnati, a great commercial city,
HdS Two lTuSl COulpdHISS VI SI,VV,upp
capital each. Also a number of 500, 600
to 500, 900 capital
Philadelphia has many small trust
companies and a few big ones. capital
varying from s125,kO0 to $S,440,OO0.
In Pittsburg there are trust companies
with 5000 capital, and from that to
s3,000,0Oo.
In Detroit 100000 capital is the mini
mum, and $4,000 the maximum cap
ital.
Minneapolis has one 100000 trust
company. while st. Pauis largest trust
capita lization is $3.50, 600
Middle Western cities of the popuia-
ton nearest to that of Washington have
few trust companies of even 100000 cap
italization, while sl,00o,O00 organizations
are few and far between after leaving
Kansas City.
All of which speaks we'll for the Wash
ington trust companies.
Investment buying in local securities
has been active and continuous during
the past week. 1t may not be generally
known, but some of our local banks
have been buying bonds on change,
having been forced into the field by the
plethora of money and the limited de-
mand therefor. The new issue by the
Norfolk and Washington Steamboat
Company have been real -favorites, and
would sell higher but for the redemption
clause. There are but $4,000 in this
issue. paying ) per cent and secured by
81, 10000 of property. The company has
no other bonds. and with good earnings
will probably not allow the issue to re-
main outstanding very long. The re-
demption price is 105.
Potomac Electric SIS have been COM
ing back of late. the last sale being
made at 10S1s. They are considered a
high-grade bond, with a redemption
clause at 40 that has kept them below
this figure.
The redemption of the Gas certificates,
G per cent debentures at par, within the
last few months, has caused some un-
easiness among buyers of bonds con-
tanning this clause. The SIS sold as high
as 1871 and would be selling close to
10 today but for the retirement as per-
mitted by the face of the issue.
Gas 5s are acting we'll, holding very
steady around ITO. There Is no retire
ment clause In this issue prior to ma
turity.
Bank stocks have acted well. Metro
politan, Commercial, and Second Ma
tional have shown the best strength in
the price list. Old-time favorites have
also made good records, and the demand
for these and other bank shares is an