Evening star., 1931-06-22
INTEREST RATE CUT
DEBATED BY BANKS
Three Prince Georges Institu-
tons May Continue to Pay
A. Per Cent on Savings.
BY a stan Correspondent OF The star.

BY stan Correspondent OF The Star.
UPPER MARLBORO, Md, June %.
With reduced interest rates on saw
ings accounts scheduled to go into effect
in five Prince Georges County banks
July /, officials of three other banks
in the county were undecided today
whether they would continue to pay
per csnt or reduce the rate to 312
per cent
State Senator Lansdale G.. Sasscer,
president of the Marlboro branch OF
the Eastern Shore Trust Co. and a
large Stockholdsr in the Brandywine
Bank, said those two institutions were
still undecided, while William LuerS,
cashier of the Bank of Bowie, said the
board of directors of that bank would
probably determine their course of &C
t1on at a meeting this week.
Five Banks Cut Rate.
The five banks which voted to cut
the interest rate to 312 psr cent were
the Prince Georges Bank & Trust Co.,
the First National Bank of Southern
Maryland. the Clinton Bank, the Citi-
zens' Bank of Riverdals and the Citi-
zenS' Bank of Laurel.
The latter bank now pays only per
cent and will not be affected by the
change. The Southern Maryland Trust
Co, although not yet officially commit
ted to the proposal to reduce interest
on savings, is reported in favor of the
change.
In explaining the position of the
banks which agreed to lower the inter
est rate, G. E. Little, secretary treasurer
OF the Prince Georges County Bankers
Association, said the banks believe
they are safeguarding the interests of
their depositors by the reduction, as it
will enable them to invest in securities
which give low rate of return, but
have at all times better market.
Possibility of further interest reduc-
tions in Maryland is seen by Albert
directors OF the Baltimore Trust Co.
and chairman of the Baltimore clear
ing house.
Statement Is Made.
In a statement to the Prince Georges
Bankers Association, pointing to the
need for lowering the per cent inter-
est rate, Mr.. Newcomer said:
For a long time mutual savings
banks OF Baltimore have been paying
4R per cent and the commercial banks
4 per cent. 1t must be evident to any
banker that department cannot safely
pc run at a loss. and when general
interest rates declined so that it was
impossible to make purchases of thor
oughly reliable bends paying a sufficient
rate OF interest to enable them to pay
expenses Of the department, plus inter
est being paid the depositors, such a
situation could only be tolerated so long
as the depression in rates was believed
temporary. When the depression appar-
emily settled down for long spell, the
mutual banks reduced their rate to 4
per cent and the commercial banks to
312 per cent.
ut is by no means certain that these
rates are low enough under present
conditions, but period of experiment
will prove this, and if they are unprof-
liable the rates will have to come down
still more"
Mr.. Little also called attention to the
fact that the Prince Georges banks
which will reduce interest will insist
that depositors present their savings
passbook when withdrawing funds.
Payment will be refused unless this is
done, and the 6epositors will be re-
quested to transfer the account to a
regular checking or demand account.