The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1928-09-17
Z Declines in Loans

offset in part by decrease in the
demand for currency.
Declines In Loans
The growth In member bank
credit. which has been rapid Tor
the year. has not given rise 10 an
Increase in reserve requirements
and consequently in demand Tor
Reserve Bank credit by member
hanks. owing to the fact that the
entire growth in member bank de
posit liabilities has been IN tims
deposits, while, owing largely 20
wold exports, net demand deposits
showed 4 decrease for the year.
since the middle of May, loans
and investments of member banks
IN leading cities, which arc Apcus
SIS per cent Of the loans and IN
vegfmente of ali member banks,
have declined" the bulletin states.
s'Whether this decline Is REPRESENT
tive. .of changes in the condition OF
an member banks Is impossible 70
s.The decline for banks in leading
cities has represented reductions n
banks holdings OF investments ana
An their loans on securities.
The board said that $1,470,OOO, 600
A reserve hank credit was 0utstand-
ing IN the third week OF August, an
increase OF $37O.O00,0 900 over the
same time last year. This increase
An reserve hank credit was brought
about by a loss OF $467, OOO.OOO from
the country's stock of monetary
cold. offset In part by q decrease o.
5000 900 in the demand for cur
gency. Changes for the year IN
ether factors in the Reserve Bank
position have been Of relatively
minor Importance. according TO the
boards analysis.
Geld Loss
sAs 4 consequence Of the loss OF
cold during the year. the ratio OF
reserves OF the Federal Reserve
hanlSs 20 their combined note ana
3epOkft liability. declined from 1875
6er cent on August "a, 1927, to O9.6
Der cent on August % Of this year,
the analysis said.
s.The present ratio for the system
a. q whole, Furthermore, represents
An average Of the ratios Tor the. ~
Federal Reserve hanks, which range
from 4G.6 per cent for the Sc. I0nls
bank to 765 per cent for the Feu-
aral Reserve Bank OF Boston"
Reserves Of the system in excess
or its legal requirements OF ~ per
cent AGAINST reserve notes in cireu'
Iation and IS per cent against de-
l,osits was about 81 800 100000 on
August %. according to the board
The amount of gold legally required
by the Reserve banks. however. 10
ynea sured under present conditions
rot by their reserve requirements
of collateral against outstanding
Federal Reserve notes. which under
the law must be covered up TO 100
Ner cent by gold or eligible paper
pledged with the Federal Reserve
The volume OF Federal Reserve
notes outstanding on August ~ was
- OF 900 900. including about $685.
900 900 Of notes held by the issuing
banks for counter requirements.
s.It Is often stated that the Fed
eraT Reserve banks could increase
their surplus gold by paying out
Federal Reserve notes and substitu-
ting them for the gold certificates
now In circulation" the statement
said.
Investments Drop
.sThis statement overlooks tn"
eact that collateral will he required
arainst additional Federal Reserve
,otes nut into circulation and that
fne entire amount Of gold tfawn
1rto the Reserve banks would thus
Aave 10 be irnpounded with the re-
aerye agents a. cover for the add
Nnrai notes issued. There would.
therefore, be no addition 10 the
surplua gold from this source"
The bulletin points out that be.
tween the middle OF May ana
August. % loans and investments
~ reporting member banks in lead
Inc cities decreased by $4S5 600 900
fhe decrease In large part having
been IT the banks In New YORK
citv. New York member banks re
Aucad their holdings of investments
~ about 313, OO0, 900 and their loans
Al securities by $345, 600. 900, while
their other loans increase by
g42, 900 900.
New Stock Issue Offered
aterrett Fleming, Inc, placed
on the local market today new
5000, 900 issue Of per cent pre-
ferred stock. par value 800 per
share. The stock is priced at 500
and accrued dividend. With each
share Of preferred stock there viii
be given Is Of q share Of common
stock of no par value.
The purpose OF the new issue IL
TO provide additional working capi
tai, as we'll as to assist the com
pany in doing more Of Its owr
automobile financing. The Officials
state that much good business II
now being turned over to Other
companies that should be retained
BY the firm.
The company started business u
washington in 1913. Robert r
FLEMING il president. The othel
Officers are to remain with hin
IN the active management OF thu
company. The circular announc
ing the issue states that bushes,
10 far this year has been wei
ahead OF any former period. II
addition TO Mr.. Fleming the dlrec
t0ro include w. B. n. Brooks. Al
len m Greenlaw. wilton j. Lam
MmA ~ q VV4aAf~