Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-02-26
COLLATERAL LOAN
ACCOUNT REDUCED
Nearly Two Billions Topped
Off Total Since Panic in
Stock Market.
BY CHARLES F. sPEARE.
ecial Dispatch to The Star.

Special Dispatch to The Star
NEW YORK, February 26.-The grad
ual reduction in the amount of bank
credit in the United States issued against
security collateral is indicated again in
the weekly figures of the Federal Re-
serve Board for the IL member banks
as of February 10. This shows reduc-
ton in loans and investments since the
stock market panic period of approx
mately $4,000, 100000.
OF the total of $24,O73 ,OO0, 900 loans
and investments in November about
$18,500, 000,OC0 were represented in the
item of loans. This was divided be-
tween loans on securities of $8,746,-
100000 and "all other" loans of So
743, 100000. The situation, according to
the latest figures today, is that all loans
hive been reduced $l,97O,000,000. The
contraction in loans on securities has
have been reduced 81 ,97O, O0O,O00 The
lateral 1898, 100000.
OF the loan reduction about so per
cent has taken place in the New York
Federal Reserve district where the
total drop of 81 ,228. 100000 that on Sc
curitieS alone was 1868, 000, 900. In
Chicago the decrease in the past three
and half months has been 1924 ,000, 900,
or about 10 pr cent. In that CITY, how
ever, the cut in loans on securities was
only $l06000,000 and $178,000,000 on
"all other" loans. In Boston the de-
crease amounts to $70,000,000, in Phila-
delphia to SGT 900 900, in Cleveland to
S94, 000, 900, in Richmond to S37 1000, 600,
in Atlanta to about $30,000,000. in st.
Louis to $31 100000, in Minneapolis to
S43, 900 900, in Kansas City to $32000,-
900 and the same in Dallas, with San
Francisco showing a cut of $35 100000.
There is ample evidence to sustain
the statement that as stocks have ad-
vanced in the last two months banks
throughout the country have been
gradually cutting down their loans on
securities, either through compulSion or
by voluntary act of borrowers. There
still is, however, a larger total of col
lateral loans in the banks than bank
erS looking for a healthy credit condi-
ton would like to see. The liquidation
from now on probably will be slower
than in recent weeks, because of the
fact that remaining securities in loans
are not as readily marketable as those
released, and there is little sign of a
thawing out of the great volume of
loans made on real estate. Some
liquidation has taken place in loans
on commodities and has had its effect
in the price movements of the main
farm products.
In spite of the reduction of nearly
81, 900 900 900 in loans and investments
since November, the total at present of
these two items in Federal Reserve
member banks is only 100000, 900 less
than a year ago. Total loans are
actually 1880 900, 600 above those of the
same period last February, with loans
on securities up $225, 900, 900 and "all
other" loans sos ,000, 900 higher than in
the IL months previously.
On the other hand, the investments
of the member banks, in spite of the
increase of $5S,000,O00 the past week,
are $420 900 900 smaller than at this
time last year. Compared with the
middle of November, the banks now
hold $50, 1000 more of United States
Government securities, but ST., 100000
less of other securities.
(Copyright, 1900