Evening star., 1931-05-23
BANKERS BACK AID
FOR j. S. RAILROADS
Mutual Banks Would Enter
Federal Reserve-New
Officers Elected.
BY EDWARD c. STONE.


BY EDWARD c. STONE.
At the closing session Of the National
Association Of Mutual Savings Banks
at the Maynower Hotel. the bankers
after carefully considering the present
move to raise freight rates, took strong
ground on all efforts Of the railroads
to increase their revenues. The matter
Is of vital Importance to the association
as the mutual banks have about 81 $780,
100000 invested in railroad securities
mostly bonds.
The association approved q resolution
presented by Austin McLanahan of
Baltimore expressing q favorable atti-
tude toward "all endeavors which may
be made by the railroad companies to
restore their earnings to normal
basis"
The resolution also asserted the or
ganization was interested in every at
tempt to improve economic conditions,
especially when the efforts are directed
toward ''the betterment Of the invest
n1ent situation"
Besides the railroad conmittal, the
association directed its Federal Legis-
lative Committee to obtain amendment
OF the Federal reserve act TO say that
savings banks optionally may become
members Of the system.
New oficers Elected.
At the last session Of the three-day
meeting, Howard Biddulph Of Newark,
NJ. j., was installed as the new president.
Other officers are: Wilson O. Wing
Of Providence. vice president; Walter e.
Hallett Of New York. treasurer, and
John w. Sandstedt of New York, ex-
ecutive secretary.
Shortly after his Inauguration, PreSi-
Dent Biddulph issued . statement say
ing the way Is now being prepared for
Industrial recovery"
Pointing out that 10000, 900 persons
had 10000, ,O00, 900 deposited In mutual
savings banks and that deposits in
commercial banks totaIed $4,000, ,c0o,-
900, the new president said IL waS
plain. that the American people have
in their savings alone great reservoir
Of liquid capital"
It was being increased each dag. he
said, adding that ''the people are in
position to engage In new undertakings
with the Arst upward turn"
'Tt Is probably that we shall have
10 accustom ourselves to new scale
OF values" he added. Neither war
prices nor depression prices, but
scale somewhere between the two"
Bank Law Changes Urged.
Statutory regulation Of savings bank
investments should net 60 beyond the
laying down Of general principles which
should govern the wise and prudent
investment Of. trust funds, the sub
committee on investments said in re-
port 70 the association. The commit
tee, however, said It was not In favor
Of complete abandonment Of legislative
regulation at this time.
It was pointed out that there was
no attempt at regulation whatever in
Maryland and Delaware. and In those
States investments made by savings
banks seem rather closely to parallel
investments made by savings banks In
states where permissible investments
are rather miUutely prescribed.
The committee favored some change
In the Stats laws which prescribe legal
lists of securities which may be invest
ed in by savings banks. where the
LIST is one rigidly prescribed by statute,
1t not infrequently happens that poor
investments continue 20 be legal while
good investments are not yet recog-
nized," the report said.
The committee reported that real
estate mortgages were and should con-
ttnue to be the backbone OF savings
bank investment.
Railroad bonds have been available
as savings bank investments FOR the
past 30 or 40 years, and, en- the whole,
with some hagrant exceptions, have
been reasonably satisfactory.
New Attitude On utilities.
public utility bonds have only re-
GENTLY been recognized as desirable saw
ings bank investments. We believe
them to be fully entitled to such status.
Industrial bonds have not as yet
achieved the status of savings bank in
veStments. At q time when common
stocks Of great American industries sell
on q very much better basis than the
common stocks Of American railroads,
this would seem TO be an anomaly
which bafdes explanation. Underlying
and first mortgage bonds Of the great
industries Of this country and Of other
nations Of the world where industry Is
equally developed are certainly entitled
10 as favorable q rating as railroad and
public utility bonds. We fail to see any
reason why industrial bonds are not
vel worthy Of consideration for inclu-
sion IN savings bank lists"
With the exception OF those New Eng
land States which permit savings banks
10 buy the stock Of commercial banks,
savings banks have been limited TO in
veBtments in the form Of creditorshtp
and have not been permitted to buy
equities. II is hard to see the logic Of
this distinction, the committee said.
Of the 31o,644.141 ,44S in assets Of
the beo mutual savings banks in the
country. s5.812, ,2o3 ,s72, or $3.50 per cent,
represented loans on real estate and
loans and discounts; 1922 ,s64, 1854, or
12.l5 per cent, railroad bonds; S1,251 :
T52, ,ls3, or Ills per cent, United States
Government and municipal bonds and
the balance other national and foreign
Issues.
Bank Convention Notes.
About 80 bankers from ali parts Of
the country were elected 70 the council
Of administration and held their nrst
nseeting Just after adjournment late
yesterday
The convention adopted a resolution
authorizing personal economy edu-
cational campaign to increase thrift
and savings throughout the country,
particularly In the 81 States not having
mutual savings banks, Tiniy was con-
sidered one OF the most vital matters
before the convention, President Wal
lace stated.
The association was urged by the
Legislation Committee to actively ad-
yocate legislation for the aggregation
Of savings deposits in national banks
together with other proposals affecting
mutual savings banks In view of the
political complexity in both branche,
Of Congress, the committee said, there
would appear TO be slight prospect oi
eny legislation at thE next session
touching the subjects mentioned in the
report.
CIGARETTE COMPANY