Evening star., 1925-10-18
BY 1. A. FLEMING.

bI Il. "A. FLEMlNU.
There seems to be an impression ir
some sections of the country and with
SOME interests that the Federal Re
serve system Is of q benefit solely and
alone to the national banks. This is
entirely erroneous, as the system Is
| and has been, Of great benefit to State
banks and trust companies time and
again.
This was especially the case in the
matter Of the Government financing
OF Liberty bonds and Victory notes
and also in rediscounting of assets OF
savings banks and trust companies,
at a time when the demand for loans
was so active that banks were COM
PEELED to rediscount to care for their
customers demands.
While non-member banks cannot do
rediscounting directly they obtain the
privilege through their correspondent,
a national bank, and all national banks
are members of the system.
The manner in which bankers per-
sonally interested in savings instttu'
tions and trust companies are lighting
for the extension of the charter or
the reserve system Is an evidence OF
its great usefulness.
1t would be decidedly selfish for the
trust companies and savings banks 10
make a fight against the enlarglng OF
the powers of national banks TO per
NIT them to make mortgage loans ana
compete for a share of this business,
the chief source OF loans IN tne
larger cities, thereby also aiding the
market for mortgage money.
Real estate operators are In 1aVor
Of this amendment being pushed
through so that there may De more
stability in the mortgage money Rates
Want to Do Mortgage Business.
Bankers are asking in the proposed
amendment 10 the reserve act lor the
right to make real estate loahS loi d
period of nYe years.
There is probably more pront IN
these relatively longtime loans than
in two and three year mortgages as
many Of these cover lnStallment pay
ments. made with great promptness
and regularity by salaried employees.
CITY bankers are permitted to make
five-year farm loans, but as ru!e
they are not competing WIN the
farmland banks, nor will the eNiseh-
cies Of city banking permit tying up
any material part OF an institution >
funds in farm loans.
An authority on banking states
that 80 per cent Of all bank deposits
are time deposits that is, OF national
banks. while with state banks they
are about 10 per cent higher. ms
permits a larger loan line. free IRON
the threat of an unusual demand
from deposiJors over the counter or
by check.
Congress has removed some Of the
handicaps under which national
ii. IrnT
changes in favor of State banks have
been made much more promptly and
with less debate by legislatures.
National banks We're not permitted
10 Operate savings departments until
1910. with the result that S3,OOO,oOo,-
OOO OF deposits have been accumulated
on which interest is earned.
Congress Is Backward.
Indifference call it by any Hape
but ignorance. for our national bank
ers have seen To ii that Congress was
not uneducated to their handicaps in
competition with other Institutions,
has caused many queries as To why
national banks are not given Il fair
chance in competition, but even more
than this il has driven away many
national banks to act in SurrenderinS
their charters and taking out State
charters. where the mortgage money
field Is open. where the reserve re
uuireInentS are much more liberal
and interest may be earned on re-
serve maintained with national banks
and elsewhere.
Great Gain in Trade.
The following facts are given as
indicative OF the great increase in
volume of trading on the Washing
ton Stock Exchange so far during the
current year and also Of the strong
upward movement in prices.
Last year up to date something
over 4 200 shares Of Washington Gas
had changed hands. This year over
500 shares have changed ownership
and the price advanced UP to Friday
to cay. and on that day it added
nearly points more to 6Si4.
Up to this time a year ago 5,S15
shares Of Capital Traction We're traded
in. This year To date over 9,400
shares have changed hands, with an
advance to better than 100.
Washington Railway and Electric
has been the active leader of the en-
tire market. the common making the
sensational advance, with reaction to
1854. In all 9.400 shares have been
traded in, as against 6,512 for the
same period last year. The preferred
shares have sold up to 6.SS4 shares
with a closing of S4, as against 1917
a year ago
Lanston has been active and G
points higher at 95ia: MerGenthaler
has been steadily bought from 157 ~
TO 1914 in the past year.
Action in Bank Shares.
Even moro surprising gains have
been made in bank shares. Indeed
some sensational advances have been
made overnight in the bid prices
without bringing out offerings.
II would be well for those interested
in some of the gilt edged non-active
bank stocks to watch their market
very closely. for there have been
many days when advances of as much
as 20 points have been made in bids
that might be overlooked otherwise.
Advances in several banks shares
have been sensational, notably in
Riggs National, American Security
and Trust. National Savings and
Trust, Columbia National and Fed
eral National while practically ali
other bank stocks have scored good
gains.
Columbia Nationals rise was SEN
sational from 1875 to 325. Federal Ma
tional from 2O3 to 80. metropolitan
from 2S8 to $40. Washington Loan
and Trust from 302 to All Riggs from
29S to 410 to 1894. Commercial from
40 to 1875, with increased trading in
all the issues named.
Some of these favoritte banking
shares are practically certain to con-
tinue on a rising scale Of prices. as
their shares concentrate in strong
hands.
Exit Good Will Patents, Etc.
It is becoming matter of good
form these days to eliminate the old
time item of goodwill. etc, from
the statements of corporation assets