Evening star., 1915-06-03
may PROTECT BONDS
IN REORGAN|zAT|ONS
Controller of the Currency Holds
That Bankers May Buy Stocks
When Necessary.
Active Day In Local Securities.
Railway Common Higher-In-
vestors Purchase Traction S.
DY I. A. FLEMING.

Banks holding stocks or bonds in
railroad company in process OF reor-
ganization may, according to an I'M
portant ruling just handed down by
the controller of the currency. protect
their Investments by subscribing to
new stock issues.
The specific proposition put forth
before the controller for answer re-
lated to the proposed reorganization OF
the Wabash Railroad Company. 1t IS
proposed to assess both the common
and preferred shareholders $50 on each
share owned. The owners of the nrst
extension As receive preferred b stock
in the new company and are obligated
to subscribe to that part of the new
stock issue that may be unprovided
for through failure of stockholders to
pay the proposed assessment. Protect
ing ones holdings of stock naturally
calls for an investment of more money,
which. in the case Of banks. is not
provided for by the provisions of the
national bank act
The controller of the currency said:
This office realizes the importance
of aiding banks. so far as practica ble'
vestments and to avoid losses which
might result from ruling whlcn
would make it necessary for them 10
force, upon an unfavorable marRet.
their holdings of Wabash bonds Inc
law has been investigated by counsel
whose opinion I have just received.
Counsel holds that, 'if in the exercise
of good faith and not as CLOAK OF oe
vice to cover unauthorized practlces,
the officers of a bank, shall act as IN
their Judgment would best conserve
the interests of the bank, and such
action would be permissive and not
subject to criticism.
The controller. acting on this ADVICE
gives the required permission to oanks
so to act, but urges the conversion OF
the stock as soon "as may be con-
sistent with prudence and good man
agement-"
This decision. bankers hold. is applica-
BILE in the reorganization of the mis-
souri,. Pacific, Rock Island or any other
railroad.
Bank Earnings.
The Farmers and Mechanics National
Bank OF Georgetown. in the ten months
between June 80. 1914, and May /. 1915,
made s27,5os. equal to 1.5s per cent on
net funds AS per cent on capital. sur
plus and undivided profits. and 1921 per
cent on capital stock.
During the same period the National
Capital Bank made $21,1 i'll, or 1.55 per
cent on net funds; 4.67 per cent on capl-
tai. surplus and undivided profits, and
1852 per cent on capital.
The Second National Bank made $780,
3s7. equal to 1.26 per cent on net funds:
All on capital, surplus and undivided
profits and SOS per cent on capital
stock.
Local Securities Active.
Buyers and sellers held about the
same views regarding prices on the
Washington stock exchange this after
noon and the result was the most ac-
tive market in weeks.
Railway common again took place
as the reader Of the list. Holders OF
these shares met the views Of the chief
buyer, who has steadily bid 81 of late.
and sold a number of quotation lots of
the stock. and when the offerings were
practically absorbed the price was ad-
vanced to 80, and this continued the
best bid until the clo.-- with 90 the
asking figure. In all, 205 shares were
sold. A little preferred stock sold at
IS, but the best bid: quotation lots,
was S4k with 85 asked.
Considerable activity developed in
Capital Traction per cent bonds. At
10S $500 face value sold. and then the
price weakened to 1867 Odd lots Of
ban 5s steady at 102A. Potomac Con-
solidated IS, 101: Railway As firm at So;
small lots sold at s21s.
Capital Traction shares were easier
though nominal. 80 being the bid, but
the stock was offered at "a. Ten shares
of Washington Gas brought 73h, while
anston stock sold at 60.
Dividend Declared.
The Continental Trust Company has
declared its regular IL per cent divi-
dend for the quarter, payable June Is
to shareholders of record June 10.