Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-01-12
INCREASE IN BANK
ACCOUNTS IS LARGE
Money Is Deposited Faster
Than Institutions Can
ReinveSt It.
BY CHARLES f. sPEARE.

BY CHARLES F. SPEARE.
Special Dispatch to The Star.
NEW YORK, January 12.-The New
York savings banks are experiencing
one of the most rapid increases in de-
posts in their history. After gaining
throughout December in amounts such
as they have seldom realized at that
season, their check-up today shows that
the gain in the first week OF January
has been equally heavy, with all report
ing the opening of many new accounts.
An officer of one of the most tmpor-
tant mutual savings banks here said to-
day that the local savings banks were
suffering from IAN embarrassment of
riches" Money has come in faster than
it has been possible to reinvest 1t under
the restrictions placed upon banks OF
this nature.
Bonds in Demand.
The rapid change in the complexion
of the bond market and in the mood OF
holders of bonds has made it difficult
for the savings banks to obtain subStan-
tial blocks of high grade corporation
obligations. Whereas in December 1t
was hard to find bidders for similar
bonds today dealers are Scurrytng all
through the financial district trying to
pick up issues that will conform to the
requirements of their savings bank
clients 1t is understood that the cash
balances of the savings banks with their
correspondent banks have been growing
at an amazing rate the last few days.
One bank tooay had on deposit six
times the normal amount at rate OF
IL per cent, established by the New
York Clearing House Association.
There was more discussion again to-
day of the recommendations OF Supt.
of Banks Broderick regarding the
greater protection of thrift and savings
accounts in commercial banks. The
general opinion was that 1t would be
difhcult to change the present status
and to put into effect the requirement
that these banks set up a reserve
against their time deposits.
One savings bank official expressed
the thought that it was more probable
that savings banks would eventually
enter the field Of the commercial bank
than that the commercial bank would
be compelled to operate under the same
restrictions as to the character OF m
vestments on thrift funds as now con-
troll the policy of the savings bank.
Interest Rate Maintained.
Contrary to expectations a consider
able number of the New York savings
banks which maintained their rate OF
interest at Az per cent when competi-
tors made a reduction in this rate
last October from Az to 4 per cent,
are holding to the old basis. Just what
they will do at the end of another six
months, If interest rates continue at
the present low figure and legal bonds
make further advances, Is not now
clear
The reduction in the rate of dis
count by the Federal Reserve Bank at
St Louis to per cent had been antici-
pated ever since the rate of the Cleve-
land institution was cut to the same
figure a short time ago. Three banks
in the Federal Reserve system have
now followed the reduction made by
the New York bank last month. 9th
ers are believed to be on the point
of lowering their rates from 81 to
per cent.
It has been reported that the Bank
of Denmark and the Bank of Sweden
would shortly reduce their rates from
315 to 3 per cent, bringing them to
parity with rates in Holland and in
England. The reserve ratio of the Bank
of England has advanced to 37.S per
cent, compared with 2215 per cent
week ago in spite of further consid-
cradle loss in gold. No change was
made in the rediScount rate OF the in
stitution, which stands at per cent.
The Bank of France made a further
gain in gold, but its reserve showed
small loss. There is the prospect that
the rate of the Bank of Germany may
be reduced some time this month.
(Copyrizht, 1870