Evening star., 1933-04-21
BANKS ARE AIDED
BY STOCK ADVANCE
Depositors and Borrowers
Are Benefited by Rise
in Quotations.
BY EDWARD C. STONE.

BY EDWARD C. STONE.
What effect the sweeping advances in
stocks and recent substantial gains in
bonds will have on Washington's closed
banks and the depositors in those banks
was a subject Of wide interest in the
financial district today.
The advances in high-class bonds will
be of direct benefit to the banks by in
creasing their assets, while the gains IN
stocks will mean more to the depositors
than to the banks themselves. The
higher quotations on bonds and stocks
are not expected to have any immediate
effect on speeding the reopening of the
13 banks.
In cases where stocks are up as COL
lateral on loans, and there are thou
sands of such loans, the borrowers will
profit by every point that stock scores.
In case the value Of the collateral may
have dropped below the amount of the
loan, the rise in prices may place the
borrower on an even basis with the
bank. In such instances, it was indi-
Gated today, the conservators have the
right to sell out the customer and close
out the loan.
Consideration for Depositors.
But such action Is unlikely to be
taken in connection with accounts
where the customer has always kept UP
his interest payments, thus having a
past record that warrants consideration.
Such loans will be carried along, bank
ers said, so that the person making the
loan will have chance to come out
ahead on his investment. If the Gus
TONER'S collateral is well above the
amount of the loan, his loan will be
carried along just as it has been unless
the bank should be ordered lquidated.
1t is hoped by bank officials that some
loans which have been considered
doubtful of payment and might have
to be written off will now become a
real asset to the bank and can even
tually be paid in full. Such cases will,
of course, take time. Should the ad-
vance in Wall street continue as far
as some people predict, both banks and
customers will be in very much stronger
positions To date, the gains are only
on paper as the banks have not sold
any bonds or stocks. ga
Extent Of Rise VITAL
In the long run, price advances in all
kinds of securities will have tremen-
dous meaning. Where banks are re-
opened, there will be a material i'm
provement in their assets. Should
bank be nquidated, the total funds to
be divided among the depositors will be
vastly increased. A great deal hinges
on the extent of the rise and how much
of 1T Is held.
Depositors are still impatient for their
banks to reopen. In answer to requests
for greater speed, Treasury officials call
attention to the fact that banks in 48
States are also demanding considera-
ton, as well as those in the District
Of Columbia. All want action at the
same time.
It was predicted in the financial dis
trict today that business will show some
upturn soon. Usually, it was explained,
q sharp gain In stocks spurs trade.
Life Insurance Sales Lower.
Sales Of new life insurance in March
In the District of Columbia were 80 per
cent lower than in the same period a
year ago, according to a dispatch re-
ceived from Hartford today. This is
exactly the same figure as the average
of the slump for the whole United
States.
Maryland reported falling off of "a
per cent in March and Virginia ex-
perienced like recession. South Caro-
lima was off 40 per cent and West Vir-
ginia was down Al per cent. The other
State in the fifth Federal Reserve dis
trict, North Carolina, was AZ per cent
below the record in new life insurance
written in March, 1882.
Every State in the Union was under
last years record. Rhode Island stood
at the top, with q loss Of only per
cent, while Nevada had the hardest luck
in bringing in new business, being 81
per cent back of March, 1882. Georgia
and Florida made quite favorable rec
ords, being of only % per cent from
the figures Of year ago.
During March the substantial sum Of
s3,470Q0o in new life insurance was
written in the District of Columbia.
Maryland's new business totaled S5,707,-
600. Virginia reported 81 1929 900, West
Virginia, s3,012,000; North Carolina, $4.-
347,O00. and South Carolina, $2,054,000.
Trading on d. c. Exchange.
There was large amount of activity
In Washington Railway & Electric As
on the Washington Stock Exchange
today. trading being in 1000 and $500
denominations. The bonds opened at
"a and closed up a point at 85.
Washington Gas S. 1858, opened the
days business, two 81, 1000 sales taking
place at 81 u. Later the same bonds
changed hands at 80.
Capital Traction stock appeared on
the board again today In small lots, the
recent price of being maintained
Mergenthaler Linotype opened at Is
and closed at PAY.
Ten shares of Washington Railway
g. Electric preferred came out on the
board at 817s. The last transfer was
In Potomac Electric Power 512 per cent
preferred stock at 1852.
Bonds in the unlisted department
were called of, as is customary on Fri
days. But few important quotation
changes were noted.
Heard in Financial District.
The District of Columbia Bankers
Association will hold its Spring busi-
ness meeting this afternoon, beginning
at o'clock, In the board room of the
American Security & Trust Building.
Many matters are to come up for dis
cuSsion A report on the American
Bankers Association council meeting
will be presented by Robert v. Fleming
Washington brokerage houses were
jammed to the doors again today as
the New York Stock Exchange opened
another hectic session. Business was
not quite as rushing as yesterday, but
the quotations aroused intense interest.
The action of the rails caused wide
comment here.
It was reported in the local financial
district today that interest in invest
ment trusts has shown marked i'm
provement during the past few days.
The demand yesterday broke all recent
records, reports say.