Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-08-10

Companies MAYA
zine, which will be
typical of our ma Charles w. Collins.
tinnsI genius for
business organization and which the
public will participate i'll ownership and
where bank managers will be the SerV-
ants of the shareholders.
II one were to call upon the preSl-
dent of one of these banks after a
merger has been agreed upon and ask
him why the merger was taxing place
he might receive a variety or answers
and practically all OF them would DE IN
the nature of business reasons. Some
times the motive is to improve the per-
sonnet of the management OF the COM
hined bank by retiring certain oncelS
and placing the more efhclent IN the
KEY positions In other cases, the con-
trolling motive might be for the ABSORB
ing bank 10 enter new neid Oh tne
banking business, as when commerce.
hank absorbS trust company or trusI
rompany absorbS a commercial BANK
Again the controlling motive might
he to increase the size OF the DanK 10
meet the demand for larger loans Dy
CORPORATIONS or by foreign governments.
There are cases where the elimination
of local competition and the prevention
of duplication is the prime motive. NO
doubt also 1t is true in some cases that
local
rootiye in absorbing other banks.
The economic Interpretation or the
bank merger movement may be re-
duced to four categorles:
! Economy and efficiency OF OPP
Grafton. x,,i,,o
preparation for participation In
foreign finance and trade
4. Movement into position for group
and branch banking
Reserve Banks Assets Compared.
IN comparison with figures shown on
the Reserve Banks statement on July
* 1929 those for the corresponding
date this wear show an increase In re-
discounts for member banks from $780,
678 200 to $58.93l 900, but total earn
mo assets of the Federal Reserve BANK
If Richmond declined during the year
from SCI, 3Ol 900 to $62 l9l 900, the re-
duction being caused by decreased m
yestments in open market paper tnls
year. r,o.o.,,a
notes rose from $53626000 on July 10,
1923 to $75.250.0O0 on July IS, 1929,
hut about half of this rise is due to the
introduction of the new currency and
therefore does not indicate as large an
increase in the regular demand for cur
rency. as the uninterrupted hgures
would indicate. Member bank reserve
deposits rose slightly during the year.
from S64.S7l 900 on July 10, 1923, 10
SOS. 696 900 on July is, 1929.
The cash reserves of the Federal Re-
serve Bank of Richmond stood at $50
O55 900 at the middle of July year
ago, but totaled $89,S74,000 on July Is
this wear. and the ratio of cash reserves
to note and deposit liabilities combined
increased from 50.49 per cent to 62.92
per cent during the year.
Credit Outlook More Serious.
Regarding money conditions the
American Bankers Association Journal
saws that money rates continue to rule
abnormally high, and while there are
no fears that the banks will not have
ample credit for financing ordinary
business, crop moving and special de-
mandS incident to Fall trade, the credit
problem appears to be growing more
serious.
Gold has been attracted to America
In large quantities by the high rates
offered. but its possible effect in ex-
banding bank credit has been onset by
the action of the reserve banks in max
ing member banks take over the
financing Of acceptances. This has
made it impossible to reduce rediScounts
to any appreciable extent, and no
grounds can be discovered that warrant
hope for cheap money for some months.
Demand for carrying stocks and TAX
ing up rights" seems to be quite in
satiable, in addition to which the pub
lie is holding a much larger amount Of
the new paper currency in circulation
than had been expected"
Heard in Financial District.
Life insurance companies have dis
covered in a definite way the value of
old customers, a truth which is known
to every business man. One of the
Eastern companies finds that during the
last year the policy holders bought ad-
ditional insurance with an average pol
icy 10 per cent larger than the average
policy sold to new policy holders.
Washington bank clearings this week
totaled S27,777 900. against $25,2l4,000
a week ago and gain of 7.3 per cent
over the corresponding week last year.
Clearings for the country as whole
we're Al per cent above the same period
a year ago.
The Merchants Bank and Trust Co.
Is presenting depositorS with pam
phlet entitled Banking and Finance
Simplif1ed. It includes rules for interest
calculation, suggestions for safeguarding
CneckS ana OII1eE HllOTII1dtIOIl VI value
The directors of the Federal Reserve
Bank of Richmond held their regular
meeting yesterday. So far as known
they left the rediscount rate unchanged
1t is likely, however that the other re-
Rional banks will follow the New York
banks lead and boost the rate before
long.
The Department of Commerce reports
that the volume of business in the
United States this week was smaller
than last week, but we'll ahead OF the
same week a year ago. Wholesale prices
showed a decline.
Leonard p. Ayres, Cleveland banker
and forecaster, believes the higher re-
discount rate will have a tendency to
stabilize the various rates for money
and may reduce the cost Of call money
He asserts that the policy Of the Fed
eral Reserve Board is to keep the redis.
count rate between the commercial pa.
per rate and that for acceptances.