The Washington times., 1913-05-11

: Criticism of the present investment
situation in Washington. and an IN
teresting suggestion of means to rem
edy the condition criticised, so tnat
the whole range Of local investments
would take on a much more liquid
character and tend TO attract wealth
ana residents to the city, are contain
I'd in an Interview with J. Selwin TAFT,
PRESIDENT OF the Washington and
southern Bank.
Mr.. TAFT suggests that q las4e m
vestment corporation be formed tor
the suppose of underwriting or actn.
,llY purchasing securities and adjust
inc: them as a basis for issuing its
own securities.
..The investment situation in WASH
instop is peculiar" he says. THE fact
that the city is not a manufacturing or
iobbinR center deprives the banks, to
large extent, of the two-name CONNER
eial paper common to cities differently
situated In this respect, while at the
same time the range and activity of our
local stock exchange securities are %
limited as to fail to supply the def
cheney by providing an active and abun-
change collateral II is. OF course. true
that we have abundance OF New York
stock Exchange collateral. but trans
actions based on the securities Of other
cities are hardly so beneficial to Wash
ington a. those based on its own.
The deficiency in good two-name
commercial paper of the kind referred
10 N to some extent made up by the
paper Of good retail houses which obtain
funds for discounting their monthly
ioblieations by borrowing money from
the banks on their own individual paper
chat II, promissory notes,) With proper
care there are ordinarily good leans
for . very worthy and ineligible pur.
pose. The amount of FIRST class papes
of this kind. however. is limited. and
meantime the banking funds of Wash
ington are growing fast-more rapidly
indeed. than those Of many of thu
prominent commercial cities of the
United States.
IT has. therefore. become an interest
iIg problem to determine how TO EN-.
pioy our abounding banking arsets in 9
way witch will insure the greatest de.
gree OF security and liquidity while
guaranteeing proper service to our de-
-poeftofs and fair degree OF Interest
to our Stockholders. These are plair
duties Observable by all. There an
others, however, no less important.
This city ID the National Capital. Il
which the wealth and intelligence OF thu
country II flowing In an increasing IA
do. We must make proper provision
for this inrushing stream OF wealth. 4
we would have II continue. Our finan
cial equipment must supply the meani
or taking care of il safely and profit
ably, for capital il shy and sensitive a
TO Its treatment and condemns abso
lately the policy represented by tn,
talent hidden in the napkin.
Until lately 1t was charged that
compared with some OF our vigorous
neighbors. whom we surpass In othel
re1pects. our financial Methods and ma
rhinery smack q little Of provincialism
While the charge fs largely uufounded
II te quite certain that we do not max,
the most of our opportunities. w,
have, II seems to me. two very piaii
tasks before US: First. to increase tn,
area of our good and liquid banking
collateral by providing local securitte
which shall be 20 attractive as to pro
mote activity in them. This is O
conrse. in contra distinction to the Gus
tom Of Washington. which IL prone d
invest very largely in securities of fixe