Evening star., 1933-10-10
MUNICIPAL BONDS
LEAD 1888 ISSUES
Other Financing of 9 Months
Less Than for Month in
1928 or 1929.
BY GEORGE T. HUGHES.
Special Dispa tch to The Star.

NEW YORK, October 10 (NANA)-
Had it not been for the municipal
financing this year, the total issues of
new capital would have been less for
nine months than in any one of the
active months of 1928 or 1929.
The loans of towns, cities and States
from January to September 80 were
1888 900 900, according to the Finan-
cial Chronicle, compared with corpora
ton borrowings of 1855, 100000. In the
same period Of 1929 new financing
reached the huge total of $9,762, 900 900.
Then, over $2,000,0O0,000 of invest
ment company stocks and $1,300,000,-
900 Of the shares Of public utilities were
1oated on an eager market. The total
for these two groups so far this year
has been about S10,000,000 The larg-
est amount Of stock was that placed by
industrial and manufacturing COM
panies, including breweries and dis
tilleries.
Profits VS.. Lquidity.
While large proportion of the New
York City banks and trust companies
more than covered their dividends In
the September quarter out Of earnings,
it is of interest to note that some that
had shown the highest degree OF
liquidity, that is, the ratio OF cash and
Government bonds to deposits, failed
to earn the full dividend requirements.
Wall Street is eager to know whether
the Senate Committee viii! investigate
the financing Of one of the railroads in
the South, now in receivership, in con-
nection with its inquiry of banking
practices.
No one has yet been able to explain
how bank with capital and surplus
OF. say, s15o,o0o, but depreciation tn
its bond account Of 100000 and a
necessary write-off on commercial loans
and real estate paper, can qualify for
the Deposit Guarantee Corporation.
There are many such instances through
out the country
Undoubtedly the Government plans to
permit as many banks as possible to OBJ
tain the deposit guarantee privilege, and
it has been noticed that the pressure on
weak banks has been diminishing re-
Gently. What will probably be done is
to convert all Of the good assets of such
banks into Government paper of some
sort and allow the depositor to get an
immediate return on his claim, probably
40 to SO cents on the dollar. and then
salvage the remaining slow assets to be
carried through to a final liquidation
at some price.
Some Face Closing.
While it is becoming evident that q
large majority of banks will be per-
mitted to enter the deposit corporation,
it is equally apparent that there are
others that must wind up their corpo-
rate affairs within the next 80 days
The bank conservators have been cut
ting expenses both by reducing the
number of employees and by lowering the
unit salary of those remaining. In a
group Of 73 banks in 16 States the old
Now it is about S1.700. This means
that there are many employees whose in
come is net much more than 81, 900 to
$1,000 year. Yet they are expected to
be accurate and honest in handling
large sums of money at wages well be-
low the minimum for nearly all classes
OF Government or municipal employees
The best loans that the R. F. c. has
MADE, Judging from the percentage of
| their repayment, have been those to
/ banks and other credit institutions or
/ organizations. OF the cash advanced to
! 6,3l7 banks. totaling S1,293,000, 900 in
| the period from February. 1882, to the
/ end OF last month. nearly SO per cent
has been liquidated. Building and loan
associations have repaid over 80 per
cent Of the Sill ,0000 borrowed and
regional agricultural credit associations
have returned over so per cent of loans
aggregating s147.000.000
On the other hand. the railroads have
repaid only l3 per cent Of 1882 900 900
received from the r. F. c. About half
of this was from the Pennsylvania sys-
tenn. Mortgage loan companies have
done just bit better than the carriers,
With Is per cent of their loans Cancelled.
(Copyr!ght, 1898. by North American News
paper Alliance, Inc.)