Evening star., 1932-07-07
TRADE ACCEPTANCE
PLAN IS EXPANDING.
Corporations Pledge Support
/ to Program for Extending
Business Credits.
BY EDWARD c. STONE.

BY EDWARD c. STONE.
Word was received here today that
E l. du Pont de Nemous g. Co. is an
other of the countrys biggest industrial
corporations which has adopted the
practice Of taking short-term acceptances
from responsible customers in payment
for goods sold to them, in this way
giving hearty support to the new trade
acceptance plan" which is expected to
help business obtain needed credit from
banks, increase bank deposits and also
serve as a means of expanding Federal
Reserve Bank credit II is claimed by
this big company that a wide use of
these trade acceptances should ex-
-pedite the return of many unemployed
to the ranks of industry and aid in re-
viving business TO a more normal
volume"
Among other corporations which have
already promised support to the plan
are General Electric, General Motors,
Standard Oil of New Jersey, Westing-
house and the United States Rubber
Co. BY use of these trade acceptances
the seller can present them at his bank
and obtain cash for his goods in ad-
vance of the time when the buyer will
have the money to pay for them. The
banks can rediscount these acceptanceS
at the Federal Reserve Banks and OBJ
tain cash so that the banks will remain
in perfectly liquid position.
How Acceptances Are Used.
The trade acceptance is simply time
draft by the seller upon the purchaser
of goods, and customarily sent by The
seller to the buyer, accompanying the
invoice for the goods. The buyer signs
the trade acceptance across the face
with the date and place of payment
as indicated in the form, and returns
it at once to the seller who Is then In
possession of a desirable form of two
name commercial paper, with definite
maturity date, eligible for rediscount
at the Federal Reserve Banks, If matur-
ing within 80 days. The buyer may
take the initiative by filling in an &C
ceptance form and signing 1t across the
face of the instrument as acceptor and
then forwarding 1t to the seller.
Federal Reserve Banks have always
been ready TO rediscount good trade
acceptances. They are permitted to buy
and hold trade acceptances against
currency issue. The Federal Reserve
System is in urgent need of additional
volume Of true commercial paper Of
which the trade acceptance Is the best
representative. These trade accep-
tances created in large volume will
rapidly find their way to the Federal
Reserve Banks either through mem
Der bank which will discount them OF
through open acceptance markets.
The trade acceptance affords means
for business concerns to put their bust
ness on practically a cash basis. Al
though trade acceptances may be dated
for payment for as long period as 81
DAYS, they are virtually cash in the
hands of the seller through sale to the
banks or in the open market.
Local bankers said today that the new
plan may prove great stimulus to
business in all parts Of the country. 1t
all depends on how many business
houses and big corporations put the
practice into effect. Latest reports from
many parts Of the country indicate that
the move Is meeting with wide favor.
Trust Company Votes Dividend.
At their monthly meeting yesterday
the board of directors of the Washing
ton Loan & Trust Co. declared the
regular quarterly dividend Of 3 per cent
on the capital stock of the company
payable August l. Books will be closed
for transfer Of stock from July % tc
August l, both dates inclusive.
Charles Delmar, president Of the
Au4COah 0CAf4CC OOA AAohObAA1-
bankers, in the woodward Building, an
nounces the election of Frank B.
Severance, cashier Of the First National
Bank of Gaithersburg, Md, to the board
of directors of the corporation.
At meeting of the board OF directors
of the First National Old Colony
Corporation in New York it was voted,
for convenience Of operation, to conduct
its business in the New England States
except Connecticut, under the name OF
1.-THE First Of Boston Corporation Of
Massachusetts" and to conduct its
business in the remaining States and
abroad under the name Of THE First
Of Boston Corporation"
Summer Lull on ID. C. Exchange
Much has been written recently on
the prospects of a Summer lull on the
New York Stock Exchange, the conclu-
sions being that trading Is already about
as quiet as it can possibly get. Apparent
ly the Summer hull hit the Washington
Stock Exchange today, when only two
transactions we're recorded The first
was a 100-share sale Of National Mort
gage & Investment preferred at 3, same
as the last previous sale. The other
transfer was 10-share lot Of Potomac
Electric Power 5ia per cent preferred
at 103. Members believe that the dull
business was for the day only, as trad
ing has held up very well for several
weeks. Security Storage has been
added to the list Of issues now quoted
ex dividend.
indicative Of some improvement in
business sentiment and activity through
out the country is the fact that Brad
streets weekly food index continued
its upward trend Of the past several
Wneks rising mora SharrllV than rr6-
viously to 81 81 during the week ended
July S. This is, however. still 23.7 per
cent below the same week a year ago.
Since there is normally little change in
wholesale prices at this time, this gain
of 25, per cent over the previous week
brings Bradstreet's index Of weekly food
prices up to 53.6 per cent Of the l928-30
average, the highest it has been since
the end of April. This figure compares
With 52.3 last week and 69.2 last year.
Financial District Notes.
President C. H. Pope Of the District
Bankers Association is taking a few
days vacation at his wife's former
home, in Goshen. N. Y.
F. w. Woolworth sales were off 13
per cent and S. S. Kresge Is per cent
during June. For the first six months
Of 1882 sales are of and IL per cent,
respectively.
The possibility that the United
States might be forced to abandon
the gold standard now is conceded TO
be ended, the Monthly Business Re
view Of Lincoln National Bank states,
adding that the run on the American
gold stock slowed down and virtually
halted during the third week in June