Evening star., 1927-05-16

mendouS increase during the last 10
years in the popularity of bonds as
bank investments. He also stated
that while loans on securities have
made huge gains in the past decade,
commercial paper eligible for redis.
count has been steadily decreasing.
During the past five years there
has been rapid increase in time and
savings deposits. Demand deposits
have increased 81 per cent while time
and savings deposits have gained
more than 90 per cent. Corporations
have found it to their advantage to
finance by long term bonds rather
than by short commitments.
Methods Used i'm Washington.
In Washington experience proves a
primary reserve against demand de-
posits should be about Is per cent
and reserves against savings deposits
should be about per cent, provided
these reserves are backed up by a
second reserve of readily marketable
bonds. which in most instances are
Government issues.
Bonds have also been found useful
to banks to be carried against Christ
clubs, which have jumped into
popularity in recent years. The
funds invested in these clubs become
payable at fixed times, and Mr.. Bell
said it had been found highly desir-
able for banks to carry bonds in their
investment lists which are payable
about the time the club deposits are
due, thus supplying an abundance of
ready money with which to meet
these obligations.
The veteran bank president men,
toned classes of bonds which he con-
siders most desirable for banks to
carry as investments, and went on to
name others which in his opinion are
less satisfactory. His remarks were
filled with practical hints for bond
statesmen, as he told frankly the kind
of bonds they are most likely to sell
to the banks. How much Mr. Bells
talk was appreciated was revealed
by the applause at the conclusion.
Charles Carroll Morgan, president
Of the club and head Of the bond de-
partment Of G.. M. p. Murphy & Co.,
presided Several invited guests at.
tended, in addition to the regular and
associate members. The meeting
wound up the series of luncheons
the club has been holding this season.
Par Bid ON New Stock Issue.
Brokers on the Washington Stock
Exchange have already made offers
on the new issue of 51a per cent Po-
tomac Electric Power preferred stock
which will be distributed to the pub
lie on June /. Bids are, of course,
purely informal, as the stock cannot
be listed on the exchange for some
time. While the stock was offered
by the company at 80, members of the
OF dy
it, such bids being made among the
brokers subject to "as, if and when
issued conditions.
Business was quiet on the local
board today, Capital Traction closing
at 1047s, Union Trust selling at 104R
Merchants Transfer & Storage com
mon at lit and Washington Railway &
Electric preferred at 915s.
In the bond division Washington
Gas 6s, sehies A, sold at1032 and 1888
Gas 5s came out at 1917 and Potomac
Electric Consolidated SIS sold at 101B B.
The last bond sale was In Wardman
Park Hotel 51as, which changed hands
at 97k.
Mckee Placed on Advisory Board.
At the meeting Of the Stockholders
Association of the Federal Reserve
Bank of Richmond, held last week,
Henry III. Mckee, president of the Ma.
tional Capital Bank, was elected to a
place on the advisory board. succeed.
ing Victor B. Deyber, president Of the
Second National Bank, whose term
expired. Robert v. Fleming, presi-
dent Of Riggs National Bank, has
another year to serve on this com
mittee
Special Meeting Tomorrow.
President Howard Moran of the Dis
trict Bankers Association. has called
a special meeting of the association
for tomorrow afternoon at headquar-
ters for final action on the question
or earlier closing of the local banks
during the hot Summer months. The
report OF the special committee, con-
sistlng of Joshua Evans, jr.; Robert
V. Fleming and George o. Vass, will
no doubt be presented to the asso-
citation.
Market Prices Are Compared.
The Washington office Of B. F.
heech q Co. has received a circular
from New York headquarters dealing
with the question as to whether stocks
are at present too high. Taking fig
ures on IL industrials and IA railroad
STOCKS, comparisons are made between
the earnings per share for the years
1924 and 1926, and the earnings per
snare to market prices, taking the
prices OF May, 1925, and the current
prices of today. The brokerage house
asserts that the future of all stocks
depends on whether the company's
earnings are on an upward or down.
ward trend, the important question
at present being to learn if the outlook
is as bright as it was in May, 1925.
Another Convention Soon.
The Association of Reserve City
Bankers will meet on May 10, 20 and
21. and several Washington bankers
are planning to attend. Among those
going from here will be w. j. Waller,
Harry v. Haynes, Robert v. Fleming
and A. M. Nevius. The program is
just being completed, and is to include
several noted bankers. New York is
to send a large delegation, a special
train already having been chartered.
North American Dividends Voted.
At meeting of the board of direc.
tors of the North American Co., held
today, quarterly dividends were de-
clared, payable on July /, 1927. on
stock held of record at the close of
business June 6, 1927, as follows: 4,
On the preferred stock $3.50 par
value), IL per cent, payable in cash
at the rate Of rs cents for each share
so held.
On the common stock without par
value), 2k per cent, payable in COM
mon stock at the rate of one-fortieth
of share for each share SO held.
The company will arrange, upon re-
quest of any stockholder, for either the
sale of dividend stock, the purchase
of fractional scrip to complete a full
share or the sale Of fractional scrip.