Evening star., 1922-05-28
By 1. A. FLEMING.

OF late bank shares have come to
the fore as desirable investments not
only locally, but in New York city
and elsewhere.
Bank shares offer g. measure OF
stability as Investments not TO be
found in Industrial stocks, in that
tories and accumulation Of bad debts
is not common to the banking busi-
ness. -.
In a way. depression affects banks.
in that the depreciation of their in
vestments is g. more or less serious
matter. and a conservative banker
often finds 1t necessary to hold on
to securities for months in order 10
take advantage OF the inevitable
period of recovery 1t has always
ed in anticipating return.
Never was there an apparently
more serious depression than that
rampant. in the security market Just
about a year ago, and the marking
down of securities was one of the
banking fraternity.
But in less than a year the turn
developed and the most serious losses
have been recovered, plus good profits.
their values on bonds, although they
have a large profit therein.
. Moreover, bank stocks pay good
dividends. and they offer opportuni-
ties for money-making through in
creased stock issues, which are usual
ly offered to shareholders a par or
at a price under market value.
Washington is an especially good
town for bankers There is always a
great demand for mortgage money
here. at least there mas been for
some years. and this promises TO con-
Commercial and collateral bor-
rowers, including the automobile
trade. take up large quantities of
available funds.
Bank shares are not considered in
the speculative class. They are all
good dividend payers. In Washing
ton all stocks listed on the stock ex
change-that is, bank shares-pay from
6 to 26 per cent. the higher distrlbu-
ton being made semiannually by
the Riggs National Bank.
Ultra-conservative banking is fire.
quently responsible for book value
considera bly,. above the market value
of the shares.
They have the value back of their
stock but are not likely to be over
generous in the distribution of divi-
dends. although they are likely to
make the extra distribution most
any time. Keeping a strong technical
position is not only conservative, but
the part of wisdom against eyentu-
alities. Then. too. 1t is an insurance
against trouble elsewhere in the
local banking field.
Some stocks carry a greater mar
ket than book value. the dividend
rate. coupled with energetic safe
management, being the reason there
for
With money as cheap and plentiful
as IL is now. bank dividends GER
tainly make themN attractive invest
ments.
Not all local bank stocks are listed
on the stock exchange; many of the
late entrants in the field have not
entered the dividend stage. All the
trust company shares are listed ex-
cept those of the Merchants Bank
and Trust Company. and they viii be
listed in the near future. and the
Munsey Trust Company.
Bank investments furnish field
for more conservative investments.
All national banks are operating un-
der the national bank act.~ subjected
to close examination twice year
and oftener in the event of suspi-
cion; governed brt sworn directors,
under the control of the controller OF
the currency. and forced to make at
least five reports a year.
In Washington all banks are under
the same supervision. but state banks
in their own bailiwicks are under
rigid supervision Of their state
officers.
Bank investments are the founda-
tion of many great fortunes.
Bank shares are not subject to the
intangible tax. The bank pays S per
cent on its gross earnings in lieu OF
personal. taxes
The following book values have
been compiled from the statements cf
the different banks at the close OF
business May 5. They are based on
each 500 of capital stock