The Washington herald., 1913-02-20
Comptroller Of Currency Puts
Ban on Use Of Capital or
Surplus for Purpose.
STOCK PRICES IMPROVE
Rails Lead Market and Prices Gain 4
Point or More in Day
of Slow Selling.
BY I. A. FLEMING.


The Comptroller of the Currency ha.
determined to put a stop to the payment
of dividends by national banks when the
earnings do not Justify such payment
If the dividends cannot lawfully be paid
under the provisions of the law, Mr.. Muir
ray has decreed that tho surplus and
capital shall not be drawn upon for that
purpose.
The Comptroller has informed his ex-
aminers throughout the country that
when losses have been incurred by a
bank equal to its profits any dividends
paid must necessarily come out of sur
plus or capital The surplus of a bank
when less than 20 per cent of the cap
ital cannot lawfully be used for the pay
ment of dividends, and the law spe-
cifically prohibits the withdrawal of any
part of the capital of bank for this
purpose"
stability. Not Dividend.
The Comptroller feels that the first
and great effort OF the directors of a
dividend. but to strengthen the institu-
tiOn by the accumulation of substan-
IIal surplus. The directors of some new
ly organized and not very prosperous
banks. he says, make a practice of dis
tributinG their meaSer earnings i'll divi-
dCnds to their stockholders under the
impression that il is necessary to pay
dividends in order to maintain the stand
ing and reputation of the bank in the
community.
"a board of directors" says Mr.. Muir
ray. ought never to declare dividend
until they understand the condition of
the bank thoroughly. and even then only
in strict accordance with the statute
governing dividends
Old stocks to the Front.
Business in the local market yesterday
was marked by the buying and sale of
tWo stocks that have not entered into
the transactions before this year. Ten
shares of the Bank of Washington were
taken at 245, but after the sale of these
shares the offered price of the stock went
to 80. The other stock referred to was
German Fire Insurance Company. which
is scarce in the local market, being held
IN strong hands as an investment and
rarely coming on the floor of the eX-
change even in odd lots. Other busi-
ness was in fair volume at current prices
Saturday being WashinSton's birthday
anniversary, and a legal holiday in the
District. bankers are giving notice to
Ihei. customers that the banks will be
closed on that day, and that those hav-
ing pay rolls and other maturing obli-
cations should attend to them on Friday,
unless they can be postponed until Mon
ddN-
New York stocks Higher.
Mondays slump in 1ndustrials. follow
ed by d heavy bear raid at the close.
did not carry over into the transactions
Of yesterday. Stocks were up consider
ably at the opening, and continued TO
show strength through the day. though
the market as a whole was slow and
inactive. The gains for the day were
q full point or better, and the condition
Of the market at the close yesterday was
much better than twenty-four hours pre-
viousIy. 1t may be true that comparing
prices now with prices a month ago.
the market shows distinct downward
swinSt Yet there is withal good invest
ment buying Of securities at these low
figures, in which the public participates
I" some extent. 1t is this feature of the |
that causes prices to rally on
any piece of good news. and which checks |
Such disturbances as those of Monday. |
There seems to be enough orders in the |
hands of traders to make any bear raid |
on stocks a dangerous game to play |
While the gain was slowest and least |
in the industrial group these securities |
followed the lead of the Rails, and some |
of them. notably the Coppers. made |
good showing for the day.
Coffee Importntfons Increase.
The value of coffee importations in the
year 1912 was the largest on |
record. amounting to sI30, ,500.0 .0G9, agains:
81. .00c.O00 in 1911. and s746D0.OOO in 1910.
'>I.WO,OO0 in both 1909 and 1904, and SlO9-
10000 IN 1852, the former high-record |
'ear. Tho quantity. however, imported /
'' l3l1 IS materially icss than Ia certain
earlier years. the number OF pounds i'm:
'ort"d in 1872 being 9ia.Op0.Op AGAINST
81 t0.C10.W0 IN 1909 and 1900. 600 in 1904
TIL" average price rer mound OF the
offc" imported was. in 1872 I3S, against
{ in 1919 and 6.S in 1902. These figures
'eDr'.sent the average price in the coun-
~ from which exported to the United
states. since the law designating the
mcthoh Of ralUin= the merchandise i'm
'orted into ihc United States requires
hat the selling Price or wholesale mar
,ct value Of the merchandise in the
"untry from which exported be accepted
- the stated value of the merchandise l.
The price Of imported coffee in 1872 was
higher than that OF recent years, though
n the fiscal years 1895 and 1896 it aver
Ged 1-2 cents per pound. and in 1891
q 10 cents. The quantity of coffee I'M
'ortcd in 1872 was not abnormally large, |
he figures above quoted for that year
that its total was less than
hat for certain earlier years the un-
sually high figures f value being due
" high prices.
About two-thirds of the coffee import. |
d in 1912 came from Brazil. the total
rom that country being 676 O0O,ooc pounds,
alued at s95.JOo.ooO. against a56. 500 900
ounds. valued at s31.0oO,0o0. from all I
ther countries.