Evening star., 1923-10-19
TREASURY SCOUTS
MOVE BY BANKS
Effort to Keep Institutions
Out of Reserve Called
"FaIIacy"-

Officials of the Treasury Depart
| ment exhibit no great concern over
the report of a concerted effort being
made by banks which are members
| of the federal reserve system to in
| duce smaller banks. not now MEM
! bers to stay out. The suggestion to
| this effect, made recently by wit
nesses before the joint congressional
| committee which is investigating the
| reasons for the failure of certain
banks and trust companies to enter
| the system, was declared to be a "faI-
| lacy"
While Treasury officials are agreed
| that II would be best for all eligible
banks to become members, they say
| the system can function without those
| smaller concerns and trust companies
| which have preferred to stay out.
That these are now being taken care
of, to their own satisfaction, by their
corresponding banks was pointed
out as the principal reason for keep
ing them from seeking membership.
Government financial authorities
say they know of no specific changes
| in the banking laws which they
could suggest to attract the smaller
banks into the system.
Bank Ratio Shows Gain.
The ratio of total reserves to net
deposit and federal reserve note la
| bilities combined gained one-tenth of
per cent during the week ended
| October II. 1923. compared with the
corresponding week Of last year. 1t
now stands at 1873 per cent,
The ratio Of the Richmond bank is
| 57.5 per cent, compared with 74.3 per
cent last year
Local Stock Trading.
| Trading in popular stock issues
| monopolized business on the local
stock exchange this morning. The
| bond list was entirely neglected.
Mergenthaler Linotype was decid-
edly strong. twenty shares selling at
1872 and 100, the trend being up
ward, and twenty-eight shares of
! Capital Traction stock sold off from
| lOOs to 1O0A. Railway preferred
was steady at 7012 and Riggs Bank
| eased off to 2981a. Continental Trus.
Company was unchanged al so.
Busy Program for BANKERS.
tainment in the annals of the city
will be offered delegates to the an
nual convention of the Investment
Bankers Association, which convenes
here October 20, so and 81.
| According to plans, which in vol
ume are not yet completed on Mon
day afternoon. October 29, at l:45
o'clock, delegates will be taken in
the steamer Charles Manchester
which has been chartered to take the
flnanciers and their families TO Mount
Vernon. On Monday evening there
will be a dance in the large ballroom
of the Willard, lasting from until l.
On the following afternoon the del
egates will be treated to a cavalry
and artillery drill at Fort Myer. while
he 9ffRrnnnn golf
nament will be run off at the Con-
gressional Country Club.
! The main social function of the con-
| vention will take place on Tuesday
night, when visiting delegates, from
present indications at least 80 in
number, will be given banquet in
the large ballroom of the Willard A
theater party for women, who will
not be invited to attend the banquet,
will be held simultaneously.
On Wednesday special luncheon
for women will be held at the Chevy
Chase Club.
Financial Condition Reviewed.
Moody's Weekly Review of Finan-
cial Conditions, in it's current issue,
| says. in part:
| "a premature weakening of COM
\ modify prices has been the chief re-
cent development. General trade is
more dependent than usual upon the
question of prices, and in the typical
( midsummer to January, based upon
! the large purchasing power enEen-
dered$by the autumn trade. Thus our
stock and bond markets seem to be q
| true barometer Of the business stu
! alton.
One industry which. however, Is
booming is the production and sale
of electricity. Every month this year
has shown large gain over last year
The producers are not much affected
by labor costs, because they do not
employ much labor, while coal is
cheaper than 1t was a year ago; and
therefore profits are satisfactory.
| Bonus legislation is again coming
to the front as an investment factor,
and tentatively the costs are estt-
mated around $500, ,000,Oo for the first
four years, or S1,137, 100000 for the
first twenty years. The immediate
federal expense is unlikely to prove
large enough to seriously hurt the
bond market; but the ultimate outlay
promises to be so great as to in
definitely postpone any reduction OF
the federal taxes paid by investors.
THE so-called gold glut is causing
uneasinesS to those who fear that II
will bring on credit imitation. Expe-
trience shows, however, that credits
,expand when business opportunities
or possibilities of profit are large and
Icontract when they are small, whether
our stock of gold increases or not.
Thus gold supplies do not dominate
3volume of credits. ard the gold glut
is harmless so long as our federal
reserve system is permitted to follow
conservative banking practices"