Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-07
BROKERS HERE CUT
MARGINS IN MOVE
TO HELP BUSINESS
New Schedules Are Much
Like Those Recently Adopt
ed in New York.
CONVENTION PROGRAM
FEATURES ANNOUNCED
Host of Young Bankers to Visit
Washington Today on Way
to Pittsburgh.
BY EDWARD c. STONE.

Washington brokerage houses have
made cuts in margin requirements SINH
lar to those recently announced in New
York. Most of the broker offices here
have liberalized their requirements To
customers and are now requiring but
20 per cent margins where they have
been asking IS per cent.
Oficials in local offices which have
not made the cut to 20 per cent say
they consider it in the interest OF the
customer to keep the IS per cent mar
gin rule This gives the customer a
viewpoint leeway in case the market
sells off In case of 20 per cent mar
gins. these brokers state, it would be
necessary to send out margin calls on
every little decline.
The reduction in margins required in
local brokerage houses has not been
made all at one time. Demands OF the
different firms vary, but all have been
making things more attractive to Gus
TONERS for several months. The first
step was taken more than a year ago.
When prices were mounting skyward
and the Stock Exchange offices were
Swamped with business, local brokers
made a rule to handle nothing smaller
than 50-share lots.
Small Traders Welcomed.
Oficials claimed they could not af-
ford to handle smaller orders. as the
small lots tied up the big orders and
worked to the disadvantage of the big
custc ners. But times have changed!
AS stocks worked lower and lower, in
order to stimulate business. the 50-Share
rule was changed to rs shares. Later
this was lowered still further, until
practically every broker house in the
city will now handle 10-share orders.
Several of the firms, however, have
retained the minimum charge OF So on
small orders, although the banks get a
lower rate. This SIS charge puts curb
on extensive trading in very small lots,
since on fractional moves the buying
and selling commissions make a severe
dent in the profits. In some instances,
however, the minimum commission has
recently been cut to 50.
Some brokers have libcralized their
margin requirements on low-priced
stocks Until recently they refused to
permit margin trading in any stocks
selling below $40 per share. In some
instances, this rule has. been changed
to permit margin deals in issues selling
as low as SIS a share. In cases where
these margined stocks drop below Sc
share, the customer is expected to buy
them outright or dispose of them.
Margin Requirements Differ.
In stating that margins have been
cut from Is to 20 per cent, the an
nouncement should be somewhat quail
fed. In most cases it applies only to
stocks selling above S25 a share. In
many instances stocks selling below $25
call for margin of SIS a share. Some
houses require a 5 point margin be-
tween $40 and $25 share and so per
cent of the market value between IS
and Sl0 a share.
Arms have fixed the 5-point require
mentS on stocks selling between 81 and
$25 share. In one or more instances 81
. share has been fixed on acceptable"
stocks selling between IS and $40
share. In most instances reductions
have been made in margins on Curb
stocks, AS well as those on the big
board"
Slight differences are found among
the local Offices, each one having its
own way of doing business. But
through the Washington Ticker Club,
In which II different firms are men,
befS, efforts are constantly being made
TO make the rules as near uniform as
possible. The aim of the changes is to
stimulate business and small lots can
be handled in dull times when they
could not be in bull market; at least,
they might not be.
Convention Features Announced.
Final plans for the entertainment of
the delegates and guests at the Thir-
tenth Annual Convention of the Dis
trict Of Columbia Bankers Association
at Hot Springs, Va, have been an
nounced by Thomas j. Groom, vice
president of the Bank of Commerce and
Savings and chairman of that commit
tee.
For three evenings during the con-
vention arrangements have been made
to have dancing in the crystal room
from 10 to r. The Homestead is equip
ped with motion picture theater, and
on Friday. June 10. through a special
courtesy of Warner Brothers, there will
be released a picture in advance of its
oficial national release date.
On Saturday evening the family din
ner will be held, which has always been
the outstanding entertainment event.
The committee has been working toward
preparing a special program which will
be unusually unique in its general ar
rangement. Prizes for the various
sports events will be announced at the
dinner.
In addition to Chairman Groom, the
members of the Entertainment Com
mittee include: w. w. Spaid, vice
chairman; L. A. Slaughter, F. w. Mac
KenZie, Edward E. Swan, James A.
Soper and Thomas w. Brahany.
$50 Visitors Due Here Today.
Washington Chapter. American Insti-
tute Of Banking, will be host to $50 or
ITS delegates today. the visitors being
on their way to the national conven-
ton of the association at Pittsburgh.
While here the delegation will visit
Arlington Cemetery and place wreath
on the Tomb of the Unknown Soldier,
the ceremony taking place at 4:45. 1t
will be the first time the organization.
which is made up OF thousands OF
banking students all over the country,
has had an opportunity to pay such
tribute.
The ceremony will be in charge OF
T. Hunton Leith, member OF the exc
cutive council. The out-of-town dele
gates will be joined by the local dele
Gates tomorrow and go to Pittsburgh
m a special train While here they Will
be taken on extended sightseeing trips
and have dinner at the Shoreham In
the evening.
Their convention program calls for
che discussion of many very live bank
Chg problems. 1t opens tomorrow.
If the practice OF banks in lowering
marginal requirements on security loans
becomes general, much additional buy
ing power for securities is held likely
TO develop.
The National City Banks latest re-