Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-12-12
SAVINGS DEPOSITS
SHOWING INCREASE
Gain Indicated in Greater
New York District Since
November 80.
BY CHARLES F. SPEARE.

Special Dispatch to The Star.
NEW YORK, December IA can
vaSs of the savings banks in the Great
er New York district, as well as OF
those in outlying territory, indicates
that deposits have been returning to
these institutions quite freely since the
end of November, but that it will take
some time to regain the losses incurred
by Withdrawals to protect commitments
in stocks and to buy stocks when the
public considered them to have reached
bargain levels in october and in No
vember.
Figures available today for Novem-
Der indicate that the net loss in New
York territory during this month was
approximately S22,00O,O O0 This COM
pareS with the shrinkage in savings
bank deposits in october Of between
$40,000,000 and $45, 100000. Some OF
the big banks in these two months lost
between 100000 and $10,000,000.
Steady Increase Shown.
There was a steady drain up to the
middle of November, with estimates
of a total decrease in deposits in the
six weeks between october and Novem-
Der is as high as $75,000,000. With
the replacing of deposits between Mo-
vember Is and the end of the month
banks were able to regain about half
of their maximum November losses. De-
cember SO far shows quite a steady in
crease among practically all of the
prominent institutions.
One of the significant features in
connection with current deposits is the
receipt of money by savings banks III
the form of Short-term investments. A
bank officer said today that his tnStl-
tuition had this week received pol
ton of large sum of money distributed
among four banks by an individual who
found that he could get a more at
tractive rate Of interest in the savings
bank than in Short-term loans. AT
the banks the earnings on his FUNDS
will be AZ per cent, while the best
that he could do on ShOrt-term cor
poration paper of the quality he de-
sired was well under per cent.
Not only are old depositors putting
back money in the savings banks after
having employed it in the market for Sc
curities, but the psychological effect of
the widespread comment in losses in
stocks has been to make persons OF
small means more conservative and to
place their funds where they are al
ways available on demand and show no
Shrinkage and at the same time give an
excellent yield to the depositor.
Withdrawals General.
Information from other metropolitan
centers indicates that savings banks
there also had heavy Withdrawals dur
ing the period of stock market excite
ment. This was especially true of New
England and the Middle West and to a
considerable extent Of the Pacific Coast.
There is no doubt but that a large
amount of money has been taken from
the banks by small depositors in the
last nine months and is permanently
located in securities. Leaders among
mutual savings bank executives believe
that more and more the function of
this type of bank will be to receive
the earnings and income of their Glen
tele for short-term periods. AS deposit
tors accumulate 81 900 or more they
will make investments in securities that
yield a higher rate than the savings
bank can afford to pay and which rep
resent partnership in the better grade
of American corporations.
The report made by the American
Bankers Association a short time ago
indicated that for the first time since
records have been kept there had been
a decrease in the total savings accounts
of American banks amounting to $685.
305. 900 for the year ending June 90,
1929. 1t was specifically stated in this
report that this decrease represented "a
draining away of savings deposits" I'M
der the lure of profits to be made in
stocks"
Further Decrease Expected.
In view of the even greater with
drawals in the second half of 1929 there
is little doubt but that the next report
covering the IL months to the end of
June, $780, will show another substan-
tial decrease in deposits, attributable to
the same causes that affected the 1929
figures.