Evening star. [volume] (Washington, D.C.) 1854-1972, 1932-12-03
DEPOSITS MOUNT
IN LARGER CITIES
Increase Laid to boarding
Decline and Transfers
From Interior.
BY CHARLES r. sPEARE.

Special Dispatch to The Star.
NEW YORK, December 3.-One of
the striking features of the current
banking situation is the increase Of the
deposits Of institutions in the larger
cities. To illustrate:
Twenty-one members Of the New York
Clearing House Association at the end
Of June showed deposits Of IS ,09s, 0oo,-
able on demand At the end OF NO
vember these same banks and trust
companies had deposits Of s6,947 ,000, 900,
an increase in five months Of nearly
$3.50, 900 900, or IA per cent. Only one
of the ii institutions in June had de-
mand deposits in excess Of 81 600, 0OO,-
600. The latest report shows two In
situations with demand deposits above
that figure.
The members OF the Boston Clearing
House and those Of the Philadelphia
association also indicate deposit gains
in the second half of this year, the one
of $64, 900 900 and the other OF $780,
0oo, 900. The total gain in deposits IN
these three Eastern cities has been,
therefore, nearly $1,000, 100000.
Shifted From Interior.
Some portion of the deposit expan-
sion in these cities Is due to transfer
Of funds from the interior. 1t renecte
phase Of banking caution that mas
developed since the period OF acute
banking troubles in the Middle west.
which continued from the early part Oh
the Winter until the end OF June Tnele
were large deposit transfers from Chi
caso to New York during the runs IN
the former city. which were only
checked by the $50 1000, 900 loan OF the
Reconstruction Finance Corporation to
the Dawes Bank. There are, however,
other factors entering into the steady
accumulation OF idle funds In central
reserve cities. -.
Prominent among them Is the heavy
import Of gold, which is rapidly onsett-
ing the amount Of gold exported to
France last Spring. There Also has
been q considerable return OF boarded
currency to the banks. This has ma
terially reduced the amount, at one
time estimated as high as 81 500 .00O,-
600, that had been taken out Of ctrcu-
lation. A new influence Is the issuance
Of $138,000,000 Of new national bank
notes under the provisions Of the act
passed by the last Congress. This has
added its quota to the constantly In
creasing volume of unemployed funds,
as the emission of the new notes has
forced a like amount Of other types OF
currency back into the banks.
Small Banks Losing.
The experience OF many interior
banks is in contrast with that Of the
large metropolitan institutions. They
are closer to the individuals who are
Of q demand and time character. TheJ
arec loser to the individuals who are
affected by reduced incomes or lack Of
employment The testimony of large
numbers of country banks is that Their
depositors are drawing on their saving!
accounts in order to balance the gar
between income and outgo, or as the
only remaining reserve where income
has totally disappeared. The last re.
port Of the savings banks Of the coun.
try showed q moderate decrease in de.
posts. Here again there is the con.
trast between savings banks as whole
and those in the New York area, which
have frequently shown substantial
monthly gains.
The dilemma of the banks whose de.
posits are rising Is to find profitable
employment for them. In spite of ef.
forts to abandon all payments Of in.
terest on deposits. members Of the New
York Clearing House Association arr
allowing depositors nominal compen.
sation for their funds. This permit.
them to buy United States Treasur,
certificates on az to 3H per cent
basis and make . atisfectory return or
the investment. They have more re.
Gently been inclined to enter the mar
ket for long-term high-grade public
utility bonds on which yields range
from AZ to 434 per cent.
Copyright, 1891