Evening star., 1931-06-18
BANKING LEADERS
DISPUTE POLICIES
Sprague and Sir Josiah
Stamp at Odds on Busi-
! ness Conditions.
BY JOHN F. SINCLAIR.


aims banking leaders are in dispute
over banking and monetary policies.
One side is led by Prof. o. M. w.
Sprague, financial adviser to the Bank
OF England. Mr.. Sprague was formerly
professor Of finance at Harvard Uni
versity.
The other side is led by Sir Josiah
Stamp, director of the Bank of Eng
land, who says that the worlds none
tary policy has had great deal TO do
with the present crisis in business.
Prof. Sprague's contention Is that the
supply of gold has had nothing to do
with the worldwide economic disaster.
He declares that the real fault lies in
overproduction and in the essential in
stability of certain industries, particu-
larly the American automobile indus
try.
The former Harvard professor scores
the United States Federal Reserve pol
icy during 1928. He believes that 1t
would have been possible to check the
speculative wave on the New York
Stock Exchange that year, just when
1t was getting under way.
Prof. Sprague also believes that
financial agencies can do very little at
this time to bring about business re-
covery, and that, while such agencies
can keep the boat from rocking and
going under, they cannot supply the
, oars or the motor-power to pull the boat
. to shore in stormy weather.
Sir Josiah Stamp, on the other hand,
Is Just as certain that the monetary
policy of the central banks has more
to do with maintaining the price level
than has any other influence. He be-
lieves that the price level must be
stabilized before there can be any sub
stantial business recovery.
In this stand Sir Josiah is supported
by Reginald McKenna, head OF the
Midland Bank, Great Britain's largest
banking institution; by Sir Charles
Adds, another English banker of repu-
tation, and by John Maynard Keynes,
British economist, now in America on
o lecture tour.
It will be interesting to watch the
results, as the trend of British banking
policy over the next generation de-
pends upon the decision made.
Insurance Business Gains.
Frederick H. Ecker, president of the
Metropolitan Life Insurance Co., stated
recently that up to the end of May the
life insurance business OF the Metro
politan in its various branches was 4.25
per cent ahead of the corresponding
business in the year 1890.
AS the Metropolitan is Americas larg-
est life insurance company, this speaks
volumes for the aggressiveness OF this
institution.
Deposits Gain.
The Northwest Incorporation, which
is interested in an important group OF
local banks throughout many North
western States, reports net gain OF
more than 10000 900 in deposits in the
last IL months. The total deposits OF
its 125 afiliated banks. as of May 81,
1881, amounted to SALT 200, 900, while the
resources of the corporation and its 1876
afiliates amounted to $496,O00,0o0.
The 1914 stockholders OF the North
west Bancorporation were told that 58
per cent of the total deposits Of the
banks at the close Of May were In cash
and due from banks, Government bonds
and other marketable securities very
high degree of liquidity.
The large deposit increases during the
past year by the banks of this corpora
ton were made principally IN the large
centers, notably Minneapolis, st. Paul,
Duluth, Des Moines Omaha, Lincoln,
Spokane and Helena.
Price Read justments.
w. j. Wollman, New York Stock Ex-
change member, thinks that there are
signs of resumption in business I'm
lines that have been readjusted. such
as the extiles, ready-made dresses for
women-priceS Of which are very low
clothing which has come down very
materially and hosiery and shoes"
What is holding back the other lines
is that they have not reduced prices"
Mr.. Wollman said. II believe the re-
adjustment is going on very rapidly
now and If it continues to completion I
would not be surprised If business in
the Fall commences to crawl upwards,
but it all depends upon the next two |
months readjuStment"
Commenting on the fact that 1t Is |
necessary to have a readjuStment in |
every line, Mr.. Wollman said:
ut would be unfortunate if the pres |
ent psychology encourages those who
have not readjusted to feel that it is |
not necessary for them to do so. It Is |
q question of equalization all around, so |
that the return for labor will be fair |
and based upon the new purchasing |
power Of the dollar"
In substance, this is a modified farm |
program. For under such a plan OF |
complete readjustment, the city man |
balance than they have been for a |
decade.
Facts On Depression.
Perhaps the most favorable sign in |
business today is the candor and frank !
ness with which the fact of the de- |
preston are being announced. 1t Is no |
longer considered "ill-advised" to tell |
what the real facts are.
At the advertising convention this |
week in New York, while the boosters |
were still strong, those who believed in
candidly facing the facts received a
most attentive hearing. That Is as
it ought to be.
The problems before the United
States can be solved only when business
men possess the courage to face the
basic facts, no matter how disagreeable
they appear to be.
Effect Of Rate Increase.
Harris Upham & Co. have figured out
that, based on even a five per cent in
crease in the 1881 freight revenues, the
following railroads would increase their
per share earnings as follows:
Chicago, Rock Island & Pacific, $6.47;
New York Central $308; New York,
Chicago & st. Louis, $6.34; Missouri
Pacific, $6.02; st. Louis g. San Fran
cisco, $4.52: Illinois Central, $4.32;
Louisville & Nashville, $4; Wabash,
1892; Atchison. 1854; Southern Rail-
way, 1888; Union Pacific, $3.41; Balti-
more & OHIO, $S49; Norfolk g. West
ern, 1881; Delaware & Hudson, $3.l8;
Chicago & Northeastern, $3.06; Erie,
$297; Atlantic Coast Line, $2.82: Kan
sas City Southern, $2.72 Reading,
$269; Bangor & Aroostock, $2.63;
Southern Pacific, $3.50; Missouri, Kan
sas & Texas, 1928; Ohio Great West
ern, Sail; Lehigh Valley, $2.08; Chi
cago Great Western preferred, $2.03;
New Haven, So; Great Northern,
$l72; Western Maryland, $1.57; Penn
sylvania, $1.54; Delaware, Lackawanna
& Western, $50; Northern Pacific,
$131; Chesapeake & Ohio, 80 cents,
and Canadian Pacific, Al cents.
OF course, these increases are based