The Washington times., 1928-10-30
DEPOSITS DROP
IN MEMBER
BANKS
By HARRY GUSACK
Financial Editor

Financial Editor
The Federal Reserve Boards $
condition statement of 632 report
ing member banks in leading cities
) as of October "a, shows q small
increase in loans and discounts
and decreases of $30,000,0O0 in
investments, OF $4,000, 900 in net
demand deposits of $49, 100000 in
Government deposits and of S32,-
100000 in borrowings from the
Federal Reserve Banks, it was an
nounced by the board today.
Loans on stocks and bonds. in
: cIuding United States Government
obligations, were $26 100000 above
the October IL total at all report
ing banks, an increase of $12,0OO,OVO
being reported by member banks In
the Chicago district. of $l1,0O0,OOO
in the Boston district and of
SO. 700, 900 in the New York district.
AL other largely commercial
loans and discounts, increased
$6,000,0O0 in the Dallas district, and
declined $I0O00.O00 in the Boston
district, $4,000, 900 in the New York
district, $4,000 600 in the st. Louis
district and $23,O0O,00 at all report
I ing banks.
Holdings of u. S. Government Sc
curities declined $22,00O,00O and
bother loans, stocks and securities
$9,000,00O below the October IL
total.
Net demand deposits, which at all
reporting banks were $S7 100000
Ice : - q OF
all districts, the principal decrease
by districts being: Cleveland, $780,
600 900; San Francisco, $4,000, 900;
Chicago. 1000 900; St. Louis. So
O00, 900; Atlanta, $4,000, 900: Rich
mond, 81 ,00O, 900. and Philadelphia,
! Sc, ,000 900. All banks participated in
the reduction of $49,0O0.000 in Gov
ernment deposits.
Principal changes in borrowings
from Federal Reserve banks for the
week, comprise a decline of $52,-
900 900 at the Federal Reserve Bank
Of New York and an increase of
Sic, ,000. 900 at Chicago.
Money Rates High
"The high level of money rates
remains the central fact in the
financial situation, and almost the
only weak spot in the business out
i look" states the current issue of
the survey published by the
|. Guaranty Trust Company of New
York. Continuing, the survey says.
while there has been no chang
IN the general credit situation Of
sufficient Importance to alter the
prospect for a continuance of com.
parativeiy tight money during the
remainder OF the year. the marked
change in the gold movement is a
factor that will tend to check any
further advance in rates. Ship.
ments Of gold to and from the
United States have been practically
at = standstill for some weeks, the
October totals for exports and i'm.
ports both being under 5000, 900
More than half of the gold imported
last month came from England,
and the remainder chiefly from
, Canada and Mexico.
The shipments of gold from Lon
) don to New York, with likelihood
OF further receipts OF the metal in
the near future, raise again the
interesting and puzzling question as
to how far the return movement is
likely to go and what its relation
is to the more important, and pre-
sumably more permanent. 'redistri-
button of Americas gold stock that
has been under way for the past
year. The comparative levels of
interest rates here and abroad pro
vide no basis for an answer. since
ethe Federal Reserve ratio is still far
above the legal minimum, and the
) Reserve banks could, by reaccumn.
lating Government securities and
acceptances in sufficient amounts,
reduce their rediseounts by an ap-
proximately equal amount and thus
produce q marked easing of open
market rates. In the absence of
any such reversal Of policy, which
must be regarded as very remote
possibility as long as the specuia-
tive situation remains as it is now,
gold may he expected to return 10
this country until money rates here
Aand abroad are more nearly in line.
Gold Imports
In the long run 1t will he found
no doubt that economic forces viii
compel further expectation Of
gold from the United States, partic-
ularly elf the flOtation OF foreign
security issues in American markets
is resumed on a large scale. But,
for the time being. the natural
trend is obscured by the policy
adopted by American banking
Z authorities in attempting to check
the flow of bank credit into the
security markets.
I'm addition to the political situa-
tion and the high level of money
rates, a factor that might have been
expected to produce some hesitancy
in the security markets was the
feeling of genuine concern expressed
al tie annual convention of the
American Bankers Association over
the credit situation resulting from
conditions in the stock market. But
the speculating public, which is in
mood to construe every develop.
mnnt in its most favorable light.
apparently interpreted the nlildness
OF the bankers warnings as a
NfaVOra BILE sign. and nrires con.