Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-12-16
STOCKS HOLD FIRM
ON D. c. EXCHANGE
Capital Traction Gains Point
Today-0ther Local
Financial Notes.
BY EDWARD C. STONE.

III AAD"fAAND ~. SAOANO'
Local securities we're steady on the
Washington Stock Exchange toGay
when the weeks trading opened. The
first stock out was Capital Traction
which sold at rs, up a point from last
- weeks close.
Potomac Electric Power 5l2 per cent
preferred figured in small-lot sales
opening at 1914 and closing at 1879.
Commercial National Co. preferred
changed hands at 1914 and Mergen-
thaler figured in two small-lot sales at
LOT, ex-dividend.
Commercial National Bank stock re-
corded four 10-share sales at 255. This
stock is selling minus the regular quar-
terly dividend and the l per cent extra
declared a few days ago. Before it
went eX-dividend, it sold for many
weeks at 258 One other bank stock
appeared on the board, Federal-Amer-
lean National selling to the extent of
eight shares at 200.
In the bond division $500 Potomac
Electric Power 6s sold at 107, Capital
traction SIS registered $4,000 and two
$500 sales at 80 and Anacostia &c Po-
tomac r. r. guaranteed SIS changed
hands at 90.
Speculation VS.. Bank Stocks.
"Ths experience in bank stocks may
be attributed in the first instance to the
pronounced period of speculative activi-
ty which sent prices of individual shares
up regardless of earnings or book val
ueS," says Trust Companies Magazine.
Such speculation was encouraged by
the general trend toward reduction of
par value of bank stocks to as low as
$40 share in many instances. Numer-
GUS mergers and reports of new align
mentS in banking control famed the
speculative mood and there existed,
therefore, a close bond between factors
governing the general stock market and
the market for bank stocks Attention
should also be directed to the great in
r crease in number of dealers in bank
stocks, the formation of cliqueS and
organization of pools which assumed
positions in driving up now one and
then another stock.
The moral of the severe decline in
bank stocks is that speculation in bank
. and trust company shares should be dis
couraged as far as possible. A large
volume of such stocks was held in weak
hands and doubtless many of such hold
= lngS were sacrificed to protect margin
accounts. That such holdings have been
eliminated is source of greater strength
in the bank stock market. That these
shares will be among the first to re-
cover on the basis of investment and
prospective value may be accepted as a
? toregone conclusion. So far as earning
power and management of banks and
trust companies are concerned, there
has been no change. 1t is quite posi-
BILE, however, that the merger movement
among banks and trust companies will
not be so pronounced as it has been in
recent years"
McFadden Explains Bill.
A bill to print the cancellation of
Federal Reserve Bank stock held by
member banks which have gone out of
business without receiver or liquidat-
ing agent having been appointed has
been introduced in the House b, Chair
man McFadden of the banking and cur
rency committee.
Discussing the proposed amendment
to the Federal Reserve act, the chair
man said the present law authorized the
surrender and cancellation of all the
Federal Reserve Bank stock held by a
member bank only when such bank %
goes into voluntary liquidation, 90 is
placed in the hands of a receiver, go
withdraws voluntarily from the system
: or "a is expelled from membership for
violation of the law.
I'm a number of cases Federal Re-
serve banks have experienced great diff
f1culty in obtaining the surrender of
Federal Reserve bank stock held by
\ member banks, which have ceased en-
: tirely to do business, but which have
: not technically gone into voluntary
!, liquidation, or into the hands of
4 receiver" Mr.. McFadden said. I'm
I Ger such circumstances, Federal Reserve
I, banks have sometimes been compelled
I 10 pay dividends in large amounts on
/. stock held by banks which have ceased
TO do business and ceased to maintain
reserve accounts with them, he said.
1T is believed this situation should
be remedied by an appropriate amend
ment to the law providing means
whereby Federal Reserve bank stock
held by such member banks may De
Cancelled and proceeds paid to them or
to their proper representatives. hi
order to make provision for this Ill
the case of both national and State
member banks. it is necessary to amend
the law in two places"
Heard in Financial District.
T. A. Fleming, former financial editor
) of The Star and still an active financial
writer, left Washington yesterday for
: Florida, where he will pass the re-
/. mainder of the Winter He will soon
: be located in the Hotel Indiatlantic at
: Melbourne, where he has host of per-
sonal friends. Pop" expressed a keen
: desire to get back to Frolida's famous
5 Winter sunshine.
Thaddeus M. Jones, cashier of the
Prince Georges Bank, is resting COM
fortably at his home at 1928 / street
( northwest following Saturdays accident,
6 when he was hit by truck at Mount
Rainier as he was about to board a
street car A bone in his heel was
broken and he will be confined at home
for some time He is a native of this
city and widely known among local
bankers.
Victor B. Deyber, president of the
Second National Bank, has recovered
from an unusually severe cold.
George o. Watson, president of the
Liberty National Bank and the Wash
ington Stock Exchange, has recovered
( from a cold which kept him at home
for several days last week.
Adolph Zukor, president of Para
mount-FamouS-Lasky who, with other
officials of the company, paid his re-
Spccts to President Hoover Saturday al
the White House, states that his COM
pany is going right ahead with plans
fol next year and is net looking for q
slump anywhere in the motion picture
business.
David Friday, Washington economist
has an article in the Bankers Magazine
on Profits and Dividends in 1880.
Earnings and dividend records of cor.
porations during the past eight years
give no indications that the anticipated
1880 business recession will be sufn'
cicntly severe to impair dividend pay
mcnts