Evening star., 1932-11-06
Bank Review Finds Improve
ment in Situation Through
out United States.
POINTS TO DECREASES
IN LIST OF FAILURES
Liquidation of Frozen Loans and
Increase in Reserve Balances
Are Also Hopeful Factors.
BY EDWARD c. STONE.

Vast Improvement in the current
banking situation. reductions in hoard
ing decreases in failures and ample
credit for sound business and trade ex-
pansion, are among the high spots in
the monthly review just presented by
the Guaranty Trust Co. Continuation
of the process of liquidation of frozen
assets growing confidence, and a
strengthening of reserve balances by
Federal Reserve member banks, have
made the outlook very much more
promising. the bank asserts.
OF course. the financial readjuStment
process is far from completed, and IN
some sections of the country the situa-
tlcn is not so favorable, particularly
in rural and agricultural communities.
Notwithstanding this. a review of the
banking structure as a whole says the
survey, finds strong support for the
opinion that any failure of the recent
upturn in general business to establish
definite groundwork for revival must
find other explanations than an in
ability of our banking system as a
whole to finance a sound expansion of
industry and trade.
Real Turn for Better.
One OF the most important financial
developments of late is the reduction
IN the number of bank failures. This
is especially worthy of note because
the high level of these failures in the
past was the primary cause of the lack
Of confidence in cur banks and the cor
responding withdrawal Of funds and
because the correction of this weakness
is a type of financial change most
likely to reach the attention of the
largest number of individuals. During
the first half of September there were
only SO bank suspensions. as against
3o5 in the corresponding period last
year.
With public confidence returning and
with the Reconstruction Finance Cor
poration rendering financial aid to the
weaker banking units. general opinion
strongly doubts that the total number
OF failures during the last four months
Of this year will even approach the
level in the corresponding period last
year, during which 60 per cent of all
the failures fer 1881 occurred
Those whose funds have been tied
up in suspended banks have unooub,-
edly felt the depression in one of its
most severe forms. and attempts to
beguile them by statistical demon
strations are hardly fitting. But it
should offer some consolation, says
Guaranty Trust. at least to recall a
fact that has been frequently over
looked. namely, that over the period
OF the last Ga years suspended banks
ON the average have paid back 81 per
cent of their deposits And the repay
ment Of 100 per cent is by no means
unusual. The steadily growing health
OF the colm.ry's bani-s today supports
the hope that history will again repeat
Itself il this respect.
Progress Made in Liquidation.
From the technical banking point of
view, the progress made in the process
OF liquidation of frozen assets is as en-
ccuraglng as any other single banking
development in recent months, the
survey continues.
OF course. there are still mank banks
with some frozen assets on their hands;
hut the general process of liquidation
is regarded as having reached the stage
where it no longer represents a serious
threat to the ability of banks to ac-
Ccmmodate business expansion.
Undoubtedly, political uncertainties
have retarded recovery and replaced
some measure OF confidence with
caution in both business and market
circles. How much of this may be
justified economically only the future
can tell. A more definite adverse in
fuence is the growing conviction among
business men that the present cost of
Government will continue to represent
a major economic obstacle until it is
drastically reduced and that no ade
quate tendency toward correction of
the situation has yet appeared.
Money Market Developments.
In the money market. the outstand-
ing Development of the month was the
decline in the call loan renewal rate
on october l3 from 2 to l per cent.
accompanied by a general lowering of
rates on time leans and bankers ac-
ceptanceS. The pressure of funds seek
ing Investment was further illustrated
by the reception accorded the offering
OF s450,000000 in 3 per cent Treasury
notes, which were oVersubscribed about
IS times. A subsequent offering of
S75,ll0000 in 9l-day bills was awarded
at an average discount of only Ola per
cent, the lowest rate ever recorded.