Evening star., 1921-07-22
PREDICT DECREASE
|NLOCAL DEPOSITS
Reduction of Federal En-
pIoyes and Investment in
Governments a Reason.
BY 1. A. FLEMING.


efals and employees having more OIL
less intimate relations with the
Treasury Department that the de.
posits Of the banks of Washington
will not approach the aggregate OF
S169,e00.000 again for several years.
Naturally, they base their estimates
on the reduced number OF employees
of the government and the natural
result of the economies that are the
order of the day with the Harding
administration.
Hundreds of millions will be cut
of many employees from war risk and
Shipping Board bureaus will certainly
make some difference.
Then, too. the possibility of the
postal savings system causing some
Withdrawals must be considered
3l53,000. 900.
With the government paying per
cent many savings banks will be
brought into closer competition. This
feature will not make so much dif,
ference in Washington as it will
throughout the interior sections.
The total deposits in Washington
June 80 last were S1S6.994, ,633. indicat-
ing a loss for sixty days of s2.339,46O.
Since then there was material gain
with the disbursements of July and
the heavy interest payments by banks
on savings deposits and many check
ing accounts as well.
Withdrawals have been heavy the
last few days. The vacation season
is on, and. while there is less travel
than usual. the unemployment condi-
tions and vacation together have
brought Withdrawals.
Bankers have expressed the bellef
that any decrease in deposits will be
reflected in a strengthening of rates,
that the prevailing rate to old GUS
toners will be made Z per cent in
stead of the 8 per cent now given.
Treasury financing through public
subscriptions has been and no doubt
will be responsible for the withdrawal
of millions from the banks of the
country. These funds have heretofore
been invested in stocks: some of the
funds thus invested are the remnants
of stock investments, while they very
generally represent the transfer of
public interest from corporate secu-
rites to partially tax free, safe gov
ernment bonds.
The strength in the mortgage money
field, the high rates offered and the
attractive character of the first trusts
rendered have been effective in Secur-
ing a part of the funds seeking in
'vestment other than in stocks and
corporate bonds.
Building operations have increased
very largely and the bond metaod of
financing has become popular to the
better supply of mortgage funds.
which. however, are still inadequate
to meet the improvement demands of
the day.
Capital Traction Strong.
Todays session Of the Washington
Stock Exchange was saved from the
usual dullness and given little in
uerest through the development of a
buying squirt in Capital Traction. For
any corporation to any extent would
have brought a break in price.
Today. however. there were orders
to buy Capital Traction shares. with
an opening sale of ten shaes at S7E,
followed by twenty-five at 87Z. and
then eighty-five shares were taken
at 49,
Other shares were entirely nominal.
The attendance of brokers was slim,
w. B. Hibbs Eugene E. Thompson
and c. ]. Bell. three Of the 'regu-
lars" being out of the city.
Discussing conditions. the National
Bank Of Commerce of New York de-
clares that the period of violent busi-
ness disturbance is passed"
I'VE will from time to time have
visible evidences of the distressing
conditions through which the coun-
TRY has been passing" says the bank.
sbut these occurrences should be re-
Garded not as indices to forward con-
4litions. but as relating to the past
The changes which have taken place
have not as yet been recognized by
khe business public for two main rea-
ksons. The period Of normal midsum-
hner dullness now at hand has OBJ
secured the certain evidences Of i'm
provement. and there has been lack
ing a thorough comprehension Of
credit conditions.
Failure to recognize the passing
of the period of insufficient credit
has resulted from lack of recognition
of the fact that for a long time the
credit shortage has been apparent
rather than real and due in large part
to the unsatisfactory character Of
some Of the risks offered. There is
now no bank credit available for
operations designed to hold prices at
fictitious levels. Orderly organized
marketing. if fair, succeeds but at
tempts to hold prices above the levels
determined by international supply
and demand are certain eventually to
fail"