Evening star., 1920-06-02
BANKERS APPROVE
INCREASED RATES
Believe That Reserve Board
Acted WiseIy-Money
Worth 7 Per Cent.
by 7. A. FLEMING.

Bankers generally give approval 10
the action of the federal reserve
banks in advancing the rate OF dis-
count TO per cent on commercial
paper. 1t is taken as an encouraging
sign that they view this action so
calmly. They recognize that the
action is not directed against banks.
but against business and commercial
interests who are thus urged to lmit
their demands to necessities ana not
to expand operations save where ao-
solutely necessary. with the advance
an aid to the accumulations of funds
for the second installment of income
tax payments and the big Intercs.
and dividend distribution Of July
plus crop movement demands
There seems to be an abundance OF
money. but the value of the commod-
ity has increased until il is worth the
new discount rates
Another evidence of the abundance
of funds was furnished this morning,
when an issue of Sf0,0Oo.00O Inlon
Pacific equipment Is was brought out
and sold and books closed in just one
hour
A. Barton Hepburn. calls attention
to the fact that the American people
are today consuming ninety-three
pounds of sugar per capita. as against
eighteen pounds in 1850. and little
over thirty pounds per capita in Eu-
-ope. as an evidence of the general
extravaganza of the American people,
declaring that the people have by
no means realized the necessity for
economy. the liquidation of loans and
the curtalment in use of credits
Commercial paper rates are iie per
cent on the average to ia per cent
Is about the maximum.
Government Draws Down Cash.
The advance in rates on call money
n nj IN oI str tor
dag was due TO the withdrawal Of
so.eoo.o00 government funds, and $S.-
100000 more will be taken out today
1t was expected that the rate would
be per cent today, but when it open
ed at per cent it gave the market
another quieting dose and checked g
little rally that had developed.
Controller Wants to Know.
John SHELTON Williams. controller of
the currency, had served notice on
the bankers of the District. and prob
ably on all national banks, that he
would desire much information when
he next calls on the local institutions
for statement of condition. prob
ably some time late in June early
In July. Moreover it will be neceS-
ssry to start preparations at once for
the call, so that when il did come the
answers would be at the finger ends
of the hookkeeperS
-Thereaft r. having received the de-
sired Information, he may not pro-
pound the same queries again. or he
may.
He wants to know the amount of
gold coin in each bank; the amount
of gold certificates; amount of clear
Ing house certificates. based on gold
or gold certificates. the amount in
dollars of silver and minor coin in
cents, the amount of legal tender
notes. national bank notes. federal
reserve and federal reserve bank
notes, etc.
Local Securities.
Gradually but surely the local Sc
curity market is passing from it's
mer dullness. At the same time
values ease off. shading a fraction or
the larger part of point as some
holder finds it necessary to make
sales in order to use the cash value in
some other manner. 1t is slow
process, hut it is not accompanied by
any press of stocks for liquidat ton or
OF bonds either, il there is any satis-
faction to the investor in that fact.
Today's sales were of Capital Trac-
tion 80 at s2k. Potomac Consolidated
5s at S3 and Railway preferred at AZ
They are low prices. but this is the
low period of security values and the
high price of money. With to III
per cent rs the value of money the
old 5 per cent dividend payers must
suffer.
Georgia Bankers' Plea Deniea.
In the case wherein a number of
state banks in Georgia attempted to
enjoint the Federal Reserve Bank OF
Atlanta from presenting checks over
the counter of paying banks for coll
lection. to the ending of their ex-
change charges. United States District
Judge Beverly D. Evans has ruled
at some length that the collection
OF checks over the counter in this
case is an exercise of the power right
ly lodged in the bank. despite the al
legged custom.
Right to BE Trust Company.
Judge Van Valkenburg of the United
states district court of western Mis-
souri, has ruled that a national bank,
acting under permission of the con-
trolier of the currency and having re-
ceived a permit from the federal re-
serve board to act in a fiduciary Ca
pacity. may use the term trust COM
pany and engage in the business of
trust company" despite a state law
which forbids any corporation to do
so. unless it is authorized by the
state law and is under the supervision
of the state bank commissioner.
Business In This DistPict.
The Federal Reserve Bulletin for
May. in commenting on business con-
ditions. has this to say of business
in the fifth reserve district, with
headquarters at Richmond:
'In district No. there has been
little change in commodity prices