Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-09-29
BY L. A. FLEMING.

Investment trusts are growing with
each passing day until they now pos
sesS gigantic capital, estimated at
about $4,000, 000, 900. A corporation
has been organized In New York that
proposes to put across an investment
trust Arm with q capital Of q billion
of dollars.
The name Of this corporation Is the
Marine Midland Co. This corporation
banks and trust companies In New York
State with combined resources Of $780,
100000, as announced by Stone, Web
Ster g. Blodget, known internationally
as an investment unit Of great bank
ing house.
Prom this start efforts Of the COM
pany will extend to other States. APP
plication will be made for a charter
for Marine Trust Co. of New York City,
filiated with the Marine Midland Co.
Sixteen big banks and trust COM
panies throughout the State Of New
York have bsen chosen for absorp-
ton by the big trust, and more will
be chosen. It Is proposed to exchange
common stock for the stock Of the
banks acquired, this requiring about
100000 shares of the 10000. 900 shares
Of common stock, no value, investment
company stock.
Investment trusts are the most pow
erful factor in the stock market today,
enabling thousands Of people OF COM
paratively small capital to take chances
in the market without the danger OF
meeting with as serious losses as they
might encounter when operating indi-
vidually and more or less blindly, or
on tips-which are always dangerous.
Trying to Reopen State Banks.
In different sections Of the country
State banks that were forced to close
last year and early in the present year
are making desperate efforts to re-
open. In Florida, where the situation
has been especially desperate, with
money a scarce commodity. some Of
the closed banks are making efforts
to freeze the deposits for period OF
four years as a consideration Of i'm
mediate reopening. Not that they ex-
pect four years to elapse before the
banks repay depositors, but they de-
sire the assurance that an emergency
be provided for.
A better way has been adopted in
Nebraska, where there are many closed
banks; there it is proposed to scale
down deposits to the actual quick as
sets of the banks, reopening to be
Immediately thereafter.
They Are Asking Bankers.
Bankers find large part Of the
business day used up answering the
questions of their customers and others
regarding this or that stock or So
Letting information from the banker
regarding the best buy on Wall Street.
Men. women and young people, some
with little If any knowledge Of Sc
curities or market customs, are per-
sistent.
Investigation among a number Of
bankers disclosed the fact that in
variably they advised caution and
urged the purchase, II investment is
to be made Of bonds. which are now
selling at low prices and not likely to
60 of at all seriously from present
levels.
No question but what there are
savings deposits being invested these
days, as well as the wealth Of big men,
in business and manufacturing.
Local Banks Lost Profits.
The very severe decline that has re-
Gently taken place in bonds has been
the cause of quite serious loss to
many of the larger banks that have
long been in the habit Of carrying
Frequently they have had large
profits in their bond accounts that did
not show in their statement and have
been referred to from time to time as
hidden assets" Some banks managed
to liquidate part Of their holdings, but
the reaction has been too speedy for
complete action. Not only has profit
disappeared in nearly every issue, but
loss has been sustained.
Capital Traction at New Low.
You will have to 90 back to the
last century, and far back at that, to
find the records Of Capital Traction
shares selling at a lower price than
now prevalent. The once blue ribbon
favorite of the Washington stock list
has come upon i'll times, and its most
enthusiastic friends cannot see any
thing to encourage a belief in speedy
recovery. The present utility commits
sion has not given any sign or hint
that could be twisted to indicate that
higher fares are possible in the future,
even though every month as 1t rolls
along shows large gross and net de-
creases in earnings. The dividend on
Capital Traction for october will
be paid on the usual per cent basis.
Some directors of the company admit
that 1t should be cut, and per cent
has been suggested-which would b
much more in proportion to the earning
than the per cent rate. The compar
apparently is giving consideration to ole
time shareholders who have long pinne
their faith on the one-time favortte.
At 5 per cent the return on tn
shares would be about equal to al