Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-05-14
BIG PROFITS MADE
s.. BY RESERVE BANKS
Some Bankers Urge Interest
on Their Reserves-Graph-
ophone Firmer.
BY I. A. FLEMING.


Federal Reserve Board, the twelve re-
gional banks of the system and their
branches will make about 500. 0GO.-
900 gross profits during the fiscal
year ending with June 80, ans excess
of some s1o.oOO.ooo over the net of
the previous fiscal period.
AS interest rates increase the prof
its of the reserve bank system will
continue to grow. so that it is more
than probable that further gain will
be added during the next fiscal year.
This big net gain has revived with
member banks the question that they
have 50 often advocated, namely. the
pa ynent of some return on their re-
serves, which mist now be carried
entirely with the regional bank OF
which the :asmber bank is a mem
Der. In the olden days 2 per cent
was paid on reserves carried in CEN
trail and other reserve cities and
banks today pay on balances.
While there is nothing in the re-
serve act to forbid the federal reserve
institutions from paying interest on
reserves, it is claimed that the pay
ment of interest would be competing
in the open market for deposits, and
that it would be a handicap to the
banks in their service to member in
situations.
The fact that the reserve system
has made it very profitable to do bust
ness through low rates of discount
and an abundance of cash when need
ed for it's members, has been of great
est value to the member banks, while
recent innovations have enabled them
to give even greater service without
proportionate increase In charges.
There are few member Banks today
ho nf nh m
changes in the conduct of the federal
reserve system, of which they give
hearty approval
The banks of the system are money
makers in the following order-New
York, Chicago, Philadelphia. Cleve-
mond Kansas City. Atlanta. ST Louis,
Minneapolis and Dallas There are
some surprises in this list. especially
in the poor showing of the last three
cities Gross earnings for the last
fiscal year were $102,0O0,000 and the
net $s2,o3s,0O0.
Mount Vernon Savings Bank.
Announcement is made of the formal
opening of the Mount Vernon Saw
ings Bank, 9th street and Massachu-
sets avenue, tomorrow. when the Of
fcers and directors will be at home
to welcome visitors and intending Gus
toners. The banking room is especial
ly attractive. and the board of direc-
tors and officers are representative
business men of the city.
Hours. $3.50 am. to 9 pm.
officers and directors of the Park
Savings Bank. on 14th street near
Park road. will be at home tomorrow
for the opening of the new addition
to their prosperous institution. Open
from $3.50 am. to 10 pm.
On the Local Bourse.
Stocks were slow. Mergenthaler sold
1913 bid and 100 asked. Lanston was
nominally easier.
Railway As were easier at So.
Union Trust Company stock sold
at rs.
Bid prices were generally lower.
GraphOphOne Common.
Graphophone common moved UP on
Wall street to 80 this morning and
eased off fractionally. The rights
were quoted at * to u. Washington
holders of these shares are at loss
to know whether to subscribe to the
new common stock offered at $3.50
to one-flfth Of their present holdings
or not.
Many have sold their rights: 9TH
ers have thought to exercise the
right" but have delayed. being un-
easy over the unexpected weakness.
"Rights" must be in the Bank Of
New York city. before the
close of business Monday. with the
draft for the amount attached. 1t
would be possible to watch the ac-
ton Of the stock on Monday and then
exercise the rights" If desired by
having the latter held in New York
awaiting instructions.