Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-08-02
CHASE BANK PLANS
FURTHER GROWTH
Absorption of Harris, Forbes
& Co. Is Step in Expan-
sion Program.
BY JOHN F. SINCLAIR.
snatch to The Star.

special DlSpatch TO Inc StaE
NEW YORK, August Although 1t
Is the worlds largest bank, the Chase
National Bank is not letting any grass
grow under its feet.
The announcement of its purchase OF
the entire capital stock OF Harris,
Forbes g. Co. brings into the Chase
group one of the worlds most powerful
retail security organizations.
This is the largest banking deal
contaminated since the stock market
smash of last Fall. 1t resembles the
Bancamerica- Blair merger of last year.
THE Chase National has never, up
10 now, engaged in retailing SECURITIES,
said one of the Chase officers yester-
day. This is the initial step. We have
been wholesalers and underwriters OF
various securities, but now we are going
one step further. With the purchase
of Harris, Forbes g. Co., which has
over so retail and distributing Of
fees throughout the world, the business
is expected to expand in a substantial
way. No corporate change is contem-
plated"
Bonds that have a rating below A
are not selling as bond dealers hoped
they would when money became plenti-
full. The market for f1rSt-claSs bonds
is good. But for the Second-class bonds
1t is poor.
Personally, I would much rather
have a frst-class common stock pay
ing me below the rate I can get on
first-class bond than have my money
invested in a second-claSs bond, which
pays more and is not supposed to have
as much risk" said well known bond
dealer to me yesterday.
Understand me, I am all for an IN
crease in the bond business. But If
had 100000 to invest right now l
should personally prefer to put it into
f1rst-claSs common stock and take
chance on the appreciation or deprecla-
ton in that stock, rather than to put IT
into a second-claSs bond, which may or
may not have the liquidability features.
OF course, bond is supposed to be
more liquid than stock.
THE difficulty with the banking situa-
ton today is that too many banks are
loaded UP with Second-claSS bonds,
which. if liquidated, represent suostan-
tial loss"
Not all bankers take this position.
For the swing from stocks to bonds Is
proceeding. Many people who invested
in stocks last year have quit and gone
back to bonds, because OF the BELIEF IN
the public mind that bond interest IN
times like these is surer than DIVIDENDS.
The National City Banks compilation,
fust issued. bears out this contention. IL
Shows a decline of 24.4 per cent In the
net profts of industrial corporations
during the first half of the present year
as compared with the first six months
Of 1929.
In the 275 Industrial corporations in
eluded in the figures the net pronts 1or
the first half of 1880 amounted TO
$685., sos 900, as compared with $751;
s57 900 during the first half OF 1923.
Rails are of worse probably than
most of them, showing 80 per cent oe-
crease in net earnings.
Such checkings, of course, are very
misleading, for the reason that 1879
was the year that more high 1noustrlal
records were broken than in any otner
period in history.
AS matter of fact, the results for
the first six months of this year are
very little short of those for the f1rst
six months of 1928.
This question presents itself: Must
dividends be reduced to the levels OF
1928? If so, it means decline OF
about 81 per cent from the present
levels.
nm in these DAYS are those that carry
plenty of cash reserves on hand ana
are ready to meet any situation that
arises.
It looks now, however. as If business
during the last quarter of 1880 Will
show up better than the last quarter OF
1929.
American business for the week which
ended July 26, based on the volume OF
checks presented for payment in the
United States, declined from the pre-
ceding week and was below the level
of the week which ended July II last
year, according to the latest report OF
the Department of Commerce.
Wholesale prices, as measured by
Irving Fishers index, were 16 per cent
lower than the corresponding period OF
last year.
One encouraging situation is the
price of bonds over both prior periods
bond prices record increases.
Building and engineering projects
and the activity of the steel mills for
the period which ended July 19 showed
marked gains over the period which
ended July IL, but compared with the
similar period Of 1929 both registered
declines.
No perceptible change in business,
enc way or the other, Is indicated.
(coryright. 1880, by North American News
paper AllianceO