Evening star., 1922-07-23
LOOK FOR EVEN HIGHER PRICES
ON FICH-GRADE INVESTMENTS
Easy Money Conditions Not Fully Dis
counted-Scrutiny of Securities Should
Be Close-Bank Organizing.

paving bills for them. or are deposit
ors carrying fair balances and in
creasing in Importance.
Deposits Of the first class are an
expense to the bank. and IL price
is paid for them they are just that
much more worthless
Deposits of the other kind are
worth between and 10 per cent, SO
say some Of the local bankers, al
though the 10 per cent seems rather
high.
Eldredge Jordan, as president of
the United States Trust Company.
was large buyer Of deposits,
1t Is probable that the slow, steady
growth of bank, properly officered
ana with the right men in it and back
IMAM II its deposits were obtained
through merger. A bank can never
hold 100 per cent of merged deposits.
Changed Methods.
In the olden days when 1t was de-
sired to start A bank in a community
some of the leading citizens met and
discussed the proposition. Coming to
an understanding. they rented a store
Tor 300 a month or less. Clipped in to
raise the desired capital engaged
cashier to attend to the business at a
relatively low salary and named as
ITS executive officer some leading bus
mess man of integrity and influence.
big bank.
Now 1t is different. Some promoter
goes into neighborhood and with a
persuasive tongue makes some near
Dig man think that he is big enough
consent to stand for the presidency
ana subscribe for block of stock.
others are partially Influenced by the
cnolce for president or the palaver
or the professional organizer to come
In. The promoter has all along placed
his price-sometimes IS share.
sometimes son ne So share. sometimes
$4,000 for a bank with 500, 600 capt.
tai: and infrequently less.
Then comes the long. hard struggle
Tor existence. All this will be elimi-
mated If the Millspaugh bill becomes
law. and until it is either defeated
or is acted on no bank so organized
can come into being as a going in
stitution.
1t is impossible to obtain a bank
well-to-do neighborhood; it is i'm
possible to get a cashier at a low
salary. while 1T is much harder to
get a successful business man to
head small bank in the hope that
1t Will one day be big one.
Finance Corporations.
Finance corporations. with and
without additions, are coming into
being very freely. Some are success
spired by the success that has at
tended the Commercial Credit Com
pany ard the Manufacturers Finance
Corporation of Baltimore.
The automobile trade. with its
enormous business in new and sec
ond- hand cars sold on partial pay
ments. varying from the strict deal
er's 40 per cent down to all kinds of
rates. has been responsible for many
corporations organized to finance this
trade. with certain-sure profit and
without serious chance for loss
Some of the corporations are COM
petinS with the banks for the cream
Of this business. but they are also
taking less safe paper and with it
also taking chances.
Some of these companies are max
Ing good and operating along safe.
sane lines that insure success
Others travel less safely.
The Coal Problem.
If there is a let-up in the very
general recovery in the industrial
world. charge it to the coal strike;
charge it to the uncertainty of GER
tain lines when the rationing of the
fuel starts. IT, indeed. it does
Charge it to the rail strike. al
though the let-up in this respect has
uOl DeeH serious as yet.
After over two years of depression
working smoothly and satisfactorily
not propaganda. but fact-business
is on the mend and will be doing
fine. once the twin evils of the day
have been removed-the strikes.
But in the interim the stocks on
the shelves of merchants are being
reduced. stocks in warehouses, also.
and when this cruel war is over the
recovery will be rapid and whole
some.
Local Securities.
Local securities are all decidedly
strong and not at all likely to sell
lower in the near future.
The table showing the high. low
and last prices for the year to date
is worthy of study. not only as indi-
eating the changes in actual transac-
tons but the nominal strength of
some bank stocks and the Indifference
of people who have the securities to
the temptation of higher prices.
There has been considerable talk of
mergers. forced and otherwise;
of the Senate, but the La Toilette law
is still on the statutes and must be
removed before any merger is possi-
BILE.
Furthermore. it will require action
on the part of the shareholders OF
slider merger propositions.
Practically the only thing that
merger might accomplish at this time
would be universal transfers.
Very Slow; News Scarce.
Dog days are slowly dragging along
and business in the capital is slow.
with real, actual news mighty scarce.
Many junior bankers have taken up
golf as a vacation recreation, Hos
kinson of the Riggs being the latest
to fall.