Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-07-01
BY /. A. FLEMING


Bankers have found the year, so far
at least, much more profitable in the
matter of employing their funds at sat-
isfactory rates than they had expected
mortgage money seeking investment,
much of it at low rates, and the light
ness Of the mercantile inquiry, doubt
as to the net returns for the year be-
ing as satisfactory as in 1927, was felt.
But the call money market has been
source of great relief and Washington
bankers have profited greatly thereby.
The heavy liquidation on Wall Street
has bettered their condition somewhat
as regards loans and reserve require
ments, and 1t is also noted that many
banks are improving their position
against the June 80 call by the con-
troller of the currency.
Some banks are also adding to their
investments, while trade on Wall Street
continues very good. Call money has
reached 61a to 8 per cent. high enough
to bring out cash from banks all over
the country.
For the first time in some years the
Federal Reserve banks have it in their
power to really influence the Stock
Market by use of their ratemaking
power to a greater extent than usual.
The outward movement of gold and
borrowing by member banks. with the
activity IN stocks, have brought about
this condition.
Loo II bankers have held steadily for
the per cent rate, with the exception
of large loans secured by collateral,
where 5 TO 5lz per cent money is avail
able at the large banks.
Mortgage Money Plentiful.
Mortgage money is plentiful at S
and 5I2 per cent, the outside rate be-
ing available for good nearby suburban
property also.
Money rates here are higher than
abroad, and may yet be responsible for
drawing much cash from there. The
reserve power OF the Federal Reserve
banks has not been seriously strained,
being still close to the 10 per cent basis
The last weekly business chart of the
Department of Commerce shows busi-
ness failures less numerous, wholesale
prices slightly higher, while building
operations have very largely increased
in the last three months; steel activity
is not far from normal, standing at
about 95 per cent. Last year the de-
crease in activity in steel continued
from the first of April for the rest of
the year. Debts to individual ac-
counts are larger than they were last
year.
Menace of Centralized Banking"
Menace of centralized banking
power" is what A. J. Viegel commits
sioner of banks in the State of Mime
sofa. terms the trend of the present day
toward Capitalization of banking re-
sources through the twin methods, mer-
gers and branch banking. toward which
the trend Of the times is directed with
positiveness
Mergers have been numerous in all
fields of business activity. starting with
the closing of the last century with the
formation OF the great manufacturing
trusts, then the growth of the chain
stores, and more recently the develop
ment of branch banking.
Necessity has been largely responsible
for changed and changing methods of
doing business. In the olden days
credit was much more restricted, and
things that were then luxuries have
since become practical necessities. The
automobile has been responsible for an
enormous part Of the credit extension,
4At0 Ia Oil Iudlly must
centraliEe IN order that their resources
may be SUFFICIENT to enable them to
care for their customers.
Chain Stores Advantage.
Chain stores have q much greater
advantage over independent merchants
than large bankers have over the small,
independent banker, in that they are
able to buy their supplies in large guam
titles at material better prices than
the retailer, they therefore sell cheaper
and have an even greater advantage
in cash payments. while the independ-
ent merchant still carries many of his
trade who when they have cash fire.
quently frequent the chain stores.
Chain banking is a close relation to
the branch bank but carries a threat
in the danger of trouble all along the