Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-05-16
SHIFT TING OF BANK
DEPOSITS IS NOTED
Mutual Savings Institution
Balances Reflect Movements
in Stock Markets.
BY CHARLES F. SPEARE.


Special Dispatch to The Star.
NEW YORK, May 16.-This weeks
meeting at Atlantic City Of the National
Association of Mutual Savings Banks
has brought up anew some of the prob
lens that are facing these institutions
IN an era of strong competition. not
only for long-term bank deposits but
in shifting the trend of savings from
the banks into various forms Of secu-
rity investments and trust funds.
The mutual savings banks had to
bear their share of the Withdrawals that
occurred last year when the public was
specializing heavily in the stock market
and needed to take money from the
banks to protect margins, and later
when further large Withdrawals were
made when securities had reached q
bargain basis. Again, two weeks ago,
they experienced quite heavy with
drawals in the New York area when
stocks had a secondary reaction. The
figures of losses then were relatively
small compared to those between the
end of August and the end of Novem-
Der, 1929. In fact, in the first four
months of this calendar year savings
bank deposits In New York State are re-
ported to have increased $79,000,000.
Interest Payments.
Practically all of the savings banks In
the metropolitan area and some of those
in New Jersey and upstate New York
are paying interest of AZ per cent on
daily balances. There are a large num-
Der Of savings banks in addition that
by reason of special situations are able
to do even better for their depositors.
One institution in New York City re-
Gently raised its rate to 4A per cent.
Some outside of New York are paying D
per cent, though not on daily balances.
The general trend toward the AZ
per cent savings bank rate developed
during the period when the return on
all forms of investments was high. It
was helped considerably by the unusual
call money rates that were quoted in
1928 anA 1929. Savings banks are
known to have been among those that
put out a portion of their surplus funds
into the call money market during the
period of Its maximum high rates.
At no time since the Az per cent
savings bank rate was established has
money been so low as it IS at present.
To some extent this Is of advantage to
the savings banks, which permit, by
their AZ per cent rate, q higher return
on funds deposited with them than Is
available In any Of the ordinary uses Of
banking funds except securities. Even
here the better grades Of corporation
DOIlClS dI1u IlOJcS tlldL are tdAduAC O1AJ
return about the equivalent of the saw
ings bank rate. That this is being ap-
preciated is evidenced by the increase
In savings bank deposits in O period
when there is a great deal Of unemploy-
ment and when Withdrawals are neces-
sary to carry individuals and their fam
lilies through weeks and months Of
reduced income.
Realty Mortgages.
There Is no evidence that the change
in general money rates, or the decline
in yield on such corporation securities
as are legal for savings banks, win dis
turb the existing savings bank deposit
rate. In fact, the chief executive Of
one of the largest mutual savings banks
IN New York City said the other day
that his institution could, If necessary.
pay more than it is now paying and
still add literally to its surplus. The
highest proportion of a savings banks
earnings comes from its investments In
real estate NOR cages. In the present
real estate situation it has been possible
TO obtain new mortgages with higher
equities than have been available in
many years.
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