Evening star., 1933-04-08
MANY new MOVES
SEEN IN BANKING
Dropping of Affiliates and
I Guarding of Deposits Two
Il of Most Vital Steps.
BY EDWARD c. STONE.


BY EDWARD C. STONE.
The banking system of the country
is facing revolutionary changes in its
structure, practices and philosophy as
q result of the crisis through which 1t
passed last month, the New York T1mes
declares. Although the fun extent OF
the banking reform cannot be estimateo
until the program of legislation !ormu-
lated by the administration IN WASH
1nrton has been disclosed, there are
already ample signs OF new oeai
in the banking world.
Present indications, as lar as wan
Street can judge, point to two funoa-
mental structural changes in the bank.
ing system: First, the separation OF
banking functions by divorcfng invest
ment banking and trust banking from
commercial banking; second. the uni
fying Of commercial banking under
national system, either through FORCING
all commercial banks into. the Federal
Reserve System or Through legislatmg
State banks out OF existence.
that SO sweeping program as this
cannot be accomplished overnight.
Some parts of it may meet such de-
termined opposition as to be Impossible
of enactment. These purposes, how
ever. appear to be the objective toward
which the administration Is working
and which will be revealed piece-meai
as individual measures are Supml1ueo
to Congress.
Progress in Two Directions.
possibility Is that in connection
with the attempt to unity commercial
banking under national control Federal
insurance of bank deposits may be pro-
posed. Bankers are likely to oppose
this item in the program, II 1T comes
up, but they are prepared 70 accept
the other structural changes
While the program of banking legis-
1ation is being shaped individual bank
ers are rapidly adjusting themselves TO
a new point OF view.
This adjustment viii mean, bankers
say. q progressive reduction OF assets TO
a point where book values and market
values agree, together with drastic re-
trenchment with respect to dividends,
bonuses and other distributions OF earn
inps. Full and frank publicity for all
major details of banking transactions
will be the order of the day, bankers
agree.
clldes. progress has been made in two
directions: First, the banking system as
a whole has been getting out OF debts
piled up In February when the crisis
was developing; second, individual insti-
tutions have taken steps to anticipate
the reforms expected through national
legislation and to conserve and Strengthen
their resources.
Facts About Telephone Stock.
For the IS, 662 900 shares of American
Telephone & Telegraph stock which are
outstanding, the company has received
So, 1856 600, 900, or an average OF Sll4 per
share. Thus the company has received
s268 600 900 more than the par Of 500
per share, the opposite OF "watered
stock.
For many years an important consid-
Grafton back of the financial policy OF
the company has been the fact that
regular dividends, representing, as they
40. q return on actual cash invested.
are vital to the day-by-day living OF
tn vast majority of its hundreds OF
thousands of stockholders, more than
half of whom are women.
No stockholder owns as much as !
Der cent of the stock outstanding, the
average holding per stockholder being
81 shares. The number OF stocknoioers
was 700,851 at the end of the year,
the recent annual report says.
Local Banks Busy on Plans.
During the past week Washington
banks which have not yet received
licenses from the Treasury to reopen
have kept busy with that goal IN view.
The conservator and other officials OF
the Northeast Savings Bank are now
presenting plan to their depositors IN
connection with the raising OF new
capital which, it is hoped, will result
In the reopening of the savings bank.
The conservator and other supporters
of the Potomac Savings Bank in
Georgetown are also hard at work In
an endeavor to raise new capital by
the sale of 10000 shares of stock at $50
q share.
During the past week depositors of
the Park Savings Bank held a meeting
at which a protective committee was
appointed which was instructed to see
what might be done to better protect
their interests In the case Of this bank,
however, no steps have been taken to-
ward reopening it.
Several other banks which are not at
present permitted to take deposits are
trying to reorganize, or to build up
their capital structure so that they can
obtain Federal licenses for 100 per cent
operations. While the situation Is very
involved and requires time, some OF
these institutions hope to have definite
announcements soon.
Anderson to Address d. C. Bankers.
BENJAMIN M. Anderson, economist of
the Chase National Bank, will be the
guest speaker at the third forum dinner
of Washington Chapter, American In
~%; ;%,.f, ~ 10 orrOrdinU n Norma N
e. Towson, chairman of the Forum
Committee The meeting will be held
at the Hay-Adams House Wednesday
evening, April 26, beginning at $50.
The noted economist will discuss cur
rent banking problems. He has written
widely on banking problems and his
visit to Washington will be Of more
than ordinary significance.
Financial District Comment.
It Is now understood that provisions
separating commercial banking and
trust banking will be omitted from the
Glass bank bill and that this subject
will be taken up at later session OF
Congress. The proposal Is to be post
poned because of the difficulties of
working out the mechanics Of such "a
sereration in a short time.
Members of Washington Chapter, A.
i. B., will place in nomination candi-
dates for election as delegates to the
next national convention at a meet
ing next Thursday evening in the Bond
Building Chapter officers for the COM
ing year are also to be nominated.
National Power g. Light Co. has de-
clared the regular quarterly dividend
of 25 cents on the common stock, pay
able June / to stock of record May 10.