Evening star., 1933-06-18
Interest on Check Accounts
Specifically Barred by
New Measure.
RETURNS ON SAVINGS
BALANCES UNCHANGED
New York Clearing House Sends
Out Notices Quickly, but D. c.
Action Is More Deliberate.
BY EDWARD c. STONE.

AS a result of the passage of the
-Steagall Banking bill, now signed
by the President, Washington banks will
soon stop paying interest on demand
deposits, or checking accounts. as they
are more commonly called. The new
bank bill leaves no option in the matter
and banks can no longer offer interest
on checking balances as an inducement
to carrying large demand accounts.
The New York Clearing House Asso-
citation already has sent letters to its
members calling attention to that Sec
ton Of the act Of 1888, better known as
the Glass-Steagall banking bill, relat-
ing to the payment of interest on de-
mand deposits, stating that it has been
advised by counsel that the amendment
becomes effective Immediately upon
signing of the act by the President"
Several Of the larger New York banks
and trust companies already have sent
their own notices to 6epositors, stating
that the interest on demand deposits
henceforth will be discontinued, in &C
cordance with the law.
Attention is being directed specifically
to section lib, which provides that no
member CT the Federal Reserve System
shall, directly or indirectly, by any de-
vice whatsoever, pay any interest on
any deposit which is payable on de-
mand."
How anxious New York banks were
to cease payment of this interest is
shown by the fact that the notices were
sent out befOre the bill was even signed
Washington banks have nct been so
haSty.
The custom of paying interest on
checking accounts has prevailed here
for good many years, although con-
siderably reduced from the original
n L. y. -
has amounted to substantial sums. The
usual payments CT interest on savings
accounts remains unchanged.
Institute Delegates Due Tomorrow.
Delegates from Washington Chapter
American Institute of Banking. to the
annual convention in Chicago, are on
their way home and will reach here
Tomorrow morning. AT the annual
election, A. S. PueIicher, vice president
OF the Marshall & Isley Bank, in Mil
waukee, was elected president, succeed
ing Frank N. Hall OF st. Louis con-
troller Of the Federal Reserve bank in
that city. Charles E. Ellery of Newark,
N. j., was elected vice president.
One of the most interesting address,
es at the convention was made by Eliot
K. Bartholomew of Wood, Struthers &
Co. who talked about the railroads
When business RECEIVERS, the railroads
can haul traffic in most cases more
cheaply than ever before in history and
as result, be in a position to report
astonishing gains in net earnings, he
said. Operating ef1ciencies, he asserted,
show remarkable improvement.
One reason for this has been the
scrapping of obsolete equipment and
the use Of more modern rolling stock"
he said "The saving from the use of
more modern power is amazing. A large
eastern railroad which bought 10 loco
motives two years ago, estimates that
they have already paid for themselves"
Cotton Goes to New Position.
Barnum L. Cotton, who has been one
Of the vice presidents and trust officer
of the District National Bank, is to
become real estate officer of the Ma
tional Savings & Trust Co., according
to information obtained in the financial
district yesterday.
Mr.. Cotton has been connected with
the District National Bank for the past
eight years and is one of the citys
of this city, he is graduate Of the
Georgetown Law School class of 1921,
end is a member Of the District of Co.
lunbia Bar Association.
He is former chairman of the Fidu-
Charles Section of the District Bankers
Association and has served on several
OF the associations leading committees
At the last annual convention held at
Hot Springs, Va, he was chairman
OF the Program Committee.
The president of the National Saw
ings & Trust Co. is William D. Hoover
He will place Mr.. Coltons selection
before his directors for approval at
tomorrow's meeting.
Terminal Dividend Declared
Directors of the Terminal Refriger-
ating & Wharehousing Corporation
have declared the regular semi-annual
dividend Of $3.50 per share on the total
stock Of the company. payable June
80 to stock Of record June IA Books
will be closed from June IA to July l.
officials Of the CAPITAL Traction Co
and the Washington Railway e. Electric
Co. made most important Joint an
nouncement yesterday regarding prog
reSs toward the proposed street railway
merger. On July 3 they will submit to
their stockholders for approval the plan
for the merger which has been approx
ed by Congress Both President John
H. Hanna Of Capital Traction and Will
liam F. Famm of the Washington Rail-
way & Electric Co. expressed the Opin-
ion that the merger Will be brought
about within the two-year limit set by
OF stock are yet available
The controller Of the currency an
nounCes that charters have been issued
to First National Bank in Sewickley,
Pa, with capital Of 100000, to sue
coed First National Bank Of Sewickley.
and TO the First National Bank in La
trobe, Pa. capital $l50000. to succeed
the First National Bank Of Latrobe
Bank in Maryland Reopened
The St Michaels Bank at ST Mich
aek, Nd, has reOpened on 100 per
cent basis. following the completion Of a
reorganization plan, states John J.
Chingher, State bank commissioner
Under the plan depositors will receive
20 per cent Of their deposits and the
other 80 per cent in certificates Of ben
eflcial interest The institution in
creased its capital TO $4,000 through
the sale of new stock and has deposits
OF about S275,000.
The great depression has forced
enough Of the essential readJustments
to be made, and has resulted in creating
sufficiently serious shorts ges of essential
goods so that industry, trade and trans
portation are expanding, states Col
leonard L AyreS. vice president OF the
G&Sveland Trust Co., in his monthly re-
view of business In this country they
ere doing so with vigor never before
edualed, he added.