The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1928-08-14
| DAN MARKET
IS LUR|IVG
FIRMS
By RICHARD HATTON

BY RICHARD HATTON
An interesting outline Of the re
cent growth Of nonbank loans II
the call market IS contained in the
current issue OF the w u Wellman
and Company Review which states
that action OF the New York
Clearing House in increasing the
service charge Tor the making Of
nonbank loans on collateral and
at the same time advancing inter-
est rates on deposits brings d.
rectIy to public attention the large
increase in the amount Of nonbank
money being loaned on call in
Wall Street and also the changed
conditions surrounding the call loan
market In the past year.
Formerly New York banks sup
piled the greater part of funds for
the call loan market with very lit
tle lending being done by out-of-
town banks or coming from non
bank sources. Several years ago
Ont-of-town banks instead Of carry
ing all their surplus funds with
their New York correspondent be-
gan to enter the cali loan market.
and there has been steady in
4S-1k< III AAAty q III eAAESG &SlAtADY
but ii was not until about d year
ago that corporations, individuals
and others became material factor
In the market. The first OF this
year, when the broker loan ac-
count stood around SIS $40, 900 900,
$l,611 900 900 Of this was loaned
By New York banks for their own
account. 81 .371 ,0Oe 900 was BY out
0f-town banks and 1927. 633 900 for
the account Of other s. and year
ago there was being loaned around
IS .000. 900 for the account Of 0tla-
ers According to the last Federal
Reserve Board report. New York
banks were Ioaning for their own
account about $92S, 500 900 out-Of.
town banks around $I,49S, 300, 900,
while there was being loaned for
account Of others 81 .S32 $50 900. Or
approximately double the amount
the first Of the year
Banks Lose Control
with close to as. per cent of
the collateral loans IN the Street
coming from nonbank sources. It
may easily be seen that the New
Fork banks, which assume respon-
Bibility for the maintenance of the
call loan market, had practically
lost control of this important f,lnc.
ton or speculation, this passing
into the hands Of what might be
termed outside interests. The tre-
mendOus growth in the cash re.
sources Of the great corporations
Of the country and the large
amount Of surplus funds III the
hands Of many wealthy individuals
were attracted to the call market
nef onlv - 80. ~, 81 ~ ,,,sss,
ir,feregf rates nreuailirv ~. ia
mast several months init also IS.
cause ~ fha safafv - ~ 1900
ana The abilit "a s f.,g, rs
On irnmediafe can
,sIn 10 ofher MONEY center ~ tha
world is flaers anS5flf,sg li1.a The
Keo York can ,,ss,,s s, ,.sss ~
- r4ssss.sa safety aSd TIA go $3.50, ~
s,,,,,s,ssst 49,.
;1esI -.
funds srba y $500 - 80 ali
Ioa,,- ~ 49, -, 1919 80
hsA. $500 1ss 800 s..viisn 80 nas
te,., 80 Z.
So .,,,.s,...su. 49,
ss,.,. 49,. 8
49,. u $3.50. u ~ 80 49,. $3.50 .allas
,s - lLi5 leui'.l S
80 ~. ~ ls liz 6ulL
sna 49, 3 llooo 9L c0rporaLI a
4. ..s'ea go 49, llaso ing Strsse 49,
sOuas lnsla 1870 saia Ihas
laIse corporallons nave dlsposea
81 their pond investments IN order
20 reap the benefH of the higher
returns received in the call mar
ket.
Co. pOratiOn Income
The earnings statement of the
Virginia PmbIic Service r,ornna1,v
ana ~ s,lbsidiarfes for the second
r,iayfa,. ~ tic c,,,s,.e,,t 1yas,. Sta1..sa
$500. -,;ss,..t;,,r. ,..,,a,,,,,- ~ 81 ~
ea5 .sa.l 3. !. 1870 :, 90 10
eOI, cVnIpaIeu Win 9l.4zo.VlS
. oa lhs cvlles 49, perlou q
80 yet lncOIls. ailsr 49, -
" ~ 49,, Interest ana provis ~