Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-09-21
D. {. BANK MERGER
HOLDS INTEREST OF
FINANCIAL CIRCLES
New Issue of Stock Ar
ranged to Complete
Terms of Deal.
ADVANCE IN SECURITIES
FOLLOWS VOTE ON PLAN
History of Both Institutions Con-
cerned in the Combine
"A Is Recalled.

BY EDWARD c. STONE.

BY EDWARD c. STONE.
Interest in the local financial district
during the past week conferred almost
wholly in the merger OF the Federal
American National Bank with the Mer-
chants Bank g. Trust Co., making an
Institution with SIS, 000, 900 resources.
As the week ended, the directors OF
the Merchants Bank met and ratified
the action taken by the F'ederal-Amer-
lean Board in voting for the reduction
of the par value of the new stock from
500 per share to $50 per share. The
original merger proposition had con-
eidered the stock at 500 par.
According to the terms OF the merger
for the exchange Of stock six shares of
Federal American stock will be turned
in for 10 shares of the stock to be is
sued ara four shares of Merchants
Bank g. Trust Co. stock will be ex-
changed for 10 shares of the new Fed
eral National Bank & Trust Co. stock
This ratio of a little less than two
shares of Merchants Bank g. Trust Tor
one of Federal-American stock is con-
sidered in the financial district as tair
as could be arranged The difference,
of course, is largely due to the differ
ence in price at which the two stocks
have been selling on the Washington
Stock Exchange.
Bids on Two Stocks Advance.
It is interesting to note that the bid
prices of both stocks have advanced on
the washington Exchange since the
merger was announced. Federal Ameri-
can has gained the most, the bid price
being up about 80 points. Not long ago
the bid was down to 270. 1t wound up
the week Friday with 300 bid, and none
for sale at that figure.
Merchants Bank & Trust stock was
bid down to Ito shortly before the
merger plans were announced. 1t closed
the week at lit bid, with none for sale
at that price. The last actual sale IN
this issue was made few days ago at
100, within points Of the hign mark
for the present year.
The first sale of Federal American
stock on the exchange this year took
place at 293, which also proved to be
high for 1880. Later it dropped TO 265,
the years low mark while the last sale
was made at 275. The stock pays 10
per cent so that the yield at the last
sale price was 3.6 per cent.
The Merchants Bank 81 Trust Co
stock opened 1880 by selling on the
exchange at 1884,. 1t advanced to l35
as the high and later sold down to 100,
where it remained for some time. The
last sale was recorded at 100. AS the
stock pays per cent, at the last sale
price. 1t Yields as per cent, higher
return than that offered by the Federal
American.
Banks in Other Consultations.
In connection with the merger some
: thing about the history of the bank con-
cerned may not be aIniss. The begin
nings of the present consolidation date
back to the organization OF the Amerl-
can National Bank 81 years ago, with
In
William T. Galliher was made presloent
and the capital stock raised to, $500 900.
The American National had been IN
Operation about 10 years when Jonn
Poole. then cashier of the Commercial
National resigned and organized the
Federal National Bank, with $5oO,OOO
capital which was oversubscribed the
CAV 1t was offered. Mr.. Poole became
president and not long afterward an
other 800, 900 was added to the capital.
In 1922 the Federal National and the
American National were merged, having
a combined capital of $1,200,OOO, with
Mr.. Poole as president and William T.
Galliher chairman Of the board. In the
seven years and ten months since the
Generalization the Federal-American had
enioyed steady growth and now has a
capital of $l,60o,000. The bank Is
located in its own building
Merchants Organized in 1915.
The original Merchants Bank was
organized in 1916, with capital OF
$500 900. by Peter A. Drury. In April,
1922. the institution was reorganized
as the Merchants Bank g. Trust Co,
Mr.. Drury being president of this insti-
tuition until April, 1929, when he was
elected chairman Of the board, which
position he relinquished in July OF this
year, although he is still director
~ cd 11xy al
At the time of the reorganization In
April. 1922, this bank took over the
Dupont National Bank which became
the Dupont branch. Ir October, 1922,
the Merchants established the Brook
land branch. Two years later the
Merchants took over the Exchange
Bank OF washington, which became the
avenue branch. In 1925 the Merchants
took over the Citizens Savings Bank,
at that time located on New York
avenue.
Now the name Merchants Bank &
Trust Co. passes out of the picture, as
the two amalgamating banks are TO be
known as the Federal American Ma
tional Bank e. Trust Co. They will
give up the double team and start out
tn single harness on November /.
Book Pictures Wall Street.
Is an Introduction to Wall Street.
written by John F. Fowler, jr., and
published by Harper g. Bros. Its book
covers the technique of investing ano
specializing in a very interesting way
giving a simple and practical explana-
ton of the machinery of the New York
stock market-the kinds of securities
how they are dealt in, judging of stock
values, hte trend of the market and the
structure.
Dollars g. Sense" Appears.
Dollars 81 Sense" the 1880 yearbook
Of washington Chapter, American In
stitute of Banking, appeared yesterday
1t is one Of the most elaborate ever
put out by the chapter. The editor
In chief is Raymond d. Lewis, assisted
by j. Fred English, Mabel v. Royce
william @. Winstead and Willard q
Barker. The business manager is Rob-
ert e. Lee, his assistants being O. Earle
McGeary and j. Olan Skinner with
Harry Morris as circulation manager
The book contains elaborate sketches
of the Washington of the future, in
GLIDING the new layout of the Mall
the Lincoln Memorial Bridge, the new
Supreme Court building and the pro-
posed bridge at Great Falls Pictures
of the officers and members or the In
stitute faculty and review of all the
chapters activities add to the I'm.
usually interesting matters between the
4 tWo covers.