Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-11-19
LIABILITY OF BANK
|. STOCK QUESTIONED
Failures in Kentucky Affect
Investors in Holding Com.
pany Securities.
By JOHN =. srNcLAIR.

By JOHN p. SINCLAIR.
NEW YORK, November 1a-Doas tha
double liability Of a bank stock carry
through b the stockholders Of 4 rank
stock holding corporation2
ms question has been raised by khaN
kentucky bank failures, involving ire
Bancokentucky Corporation, which had
substantial stock investment IN tho
National Bank Of Kentucky. as wen AZ
other banks.
Bank stocks owned by an individual
carries double liability That Is to say.
II Mr.. Smith owns 10 shares of bank
stock, with par value of 500 a share
he viii have paid in at least 81 900 for
those 10 shares. But If anything hap
pens to the bank and its assets are
not sufilcient to pay all liabilities, MI.
Smith Is liable for an additional 81 600
10 help pay the debts.
But let us say that instead OF owning
the bank stock direct, Mr.. Smith owns
10 shares OF the holding company stock
which owns the bank stock Is he then
liable for an additional amount equal.
to the par value Of his holding COM
pany stock?
This question is receiving plenty Of
attention in Kentucky right now. s5
The Wheat situation.
Why did the Federal Farm Board
again enter the wheat market. in view
Of its past expensive experience? The
answer is, to meet q major crisis in
the industry.
The Western wheat co-operatives,
both in the United States and Canada,
have borrowed heavily from banks. As
wheat prices declined, and the margin
Of collateral got thinner and thinner.
the co-operatives were faced with Just
one thing-the forced selling Of millions
Of bushels of wheat. A drop Of a few
cents more q buShel might bring on a
crisis Of major proportions. ~
American millers have been contends.
ing with plenty Of cancelled orders. upon
the theory that wheat can be bought
much cheaper at a later date. "a
Possibly 100000, 900 bushels Of wheat
were affected In these two situations.
So Mr.. Legge and his anxious associates
of the Farm Board again entered the
market to stabilize prices VIII this
move be more successful than the last
one--in which the board purchased
100000 bushels and the price con-
tinued to decline?
Yesterday, wheat prices went on q
Wild selling spree at Winnipeg with
drops Of seven to eight cents o bushel
in the early trading. It Is here that the
Canadian wheat pools activities arp
conferred. ~
This wheat price situation has the
world buffsloed.
MussOIini Reduces Salaries.
Mussolini, premier of Italy, faced with
deficit Of s36,O00,00 for the first four
months Of the new budgetry year, has
announced vigorous slash in all state
salaries, amounting to fiat IL per cent
beginning December l. =
The reduction hits the army, Navy,
police, public school teachers. In fact.
every government employee.
But, in addition, those higher pad
state employees earning more than
$4,000 annually win experience a IS
per cent cut; those earning $4,000 q
year and over IS per cent cut.
It Is the only way out for Italy. Her
taxes are already very heavy, and her
national income Is small. So the presr
mier decided on this course rather than
allow imitation to demoralize ItalyS
currency and credit. N
While some may question the wisdunn
OF this course, none iwill question the
courage necessary to put such policy.
into effect. Il
AirpIane Telephones. .ss,
on 300 miles OF the airway between
Chicago and San Francisco the BoeinR
System trt-motored nail-passenger.
plane pilots now are not only able to
telephone TO the ground, but, II blind
folded, they can keep their planes on
q line of flight, through a radio beam
| which discharges dots and dashes."
For so days the pilots of this system
on the 2,025-mile Chicago-to-San Fran
cisco run have been utilizing two-way
| telephone whereby they talk from their
plares to the ground, getting advance.
weather information, dispatching orders
anc steering clear Of the bad weather
ahead.
Now another scientific appliance has
been added. It Is the directive radio
beacon, which broadcasts the radio
BEAM After leaving an airport the
| pilot finds the course indicated by the
directional apparatus of that station
until halfway to the neyt, when the
beacon on the field Of his destination
becomes effective. He follows that
beam, as shown on his receiving set
to the scheduled stop. ~ a
Transmitters radiate characteristic.
dot-and-dash signal. If a Boeing pilot
heards "dot-dash," he knows he Is TO
the left of his true course. When he
gets "dash-dot," he knows he Is to the
right of his course.
Thus fog is about to be conquered,
and another milepost in aviation is re=s
corded.
ShipbuiIding Orders.
There is one bright spot in the field
Of shipbuildingl
Homer l.. Ferguson, president Of the
Newport News Shipbuilding g. Drydock
Co. and former president Of the United
States Chamber of Commerce, says
orders are already In sight for the con-
struction of Al modern passenger and
cargo ships entailing q cost Of about.
$140, 000, 900, and many more ships are
contemplated, so that the total ex-
penditures for the next few years for
the shipbuilding industry win be about
$28O,000,0OO.
But these are not merchant ships.
In this field the United States lags far
behind. OF the 1858, 900 gross tons Of
merchant vessels under construction
throughout the world at the end Of
October, Great Britain led with 43 per
cent, while the United States was build
ing only per cent. It costs q great
deal more to build ships in the United
States than in Europe. American own
ers of cargo carriers have this problem
to meet.
Mr.. Ferguson furnishes some inter-
Great Britain has built over 500 cargo
United States only three. At the mo-.
ment no such vessels are being built
in the United States.
! American ships carry about one-thirdf
of Americas foreign trade and foreign
ships are carrying the other two-thirus.
ITO put the United States on the
seas where IL belongs" saws MFR FER