Evening star., 1933-12-08
CLEARING HOUSE
/ BACKS R. F. c. PLAN
Capital Association Supports
Drive to Strengthen U. S.
Bank System.
BY EDWARD C. STONE.

BY EDWARD C. STONE.
The Washington Clearing House As
sociation has joined the array Of clear
lng house associations all over the
United States which are backing Presl-
dent Roosevelt'S plan toward speeding
hp national recovery by strengthening
the capital structure of banks by the
sale of preferred stock or capital notes
to the Reconstruction Finance Corpora
tion.
At a meeting of the Washington
Clearing House Association. held yes
terday afternoon after banking hours,
the association approved the plan in
principle and recommended that all
members and d<aSsociate members of the
local association give careful considera-
tion to the adviSability of increasing
their capital structures and taking ad-
vantage of the opportunity offered by
the Reconstruction Finance Corporation.
The following resolution was adopted
by the association, signed by H. H. Nc
Kee. the chairman, and made public
to-day by Victor B. Deyber, secretary OF
the clearing house:
Resolved, That the Washington, D. C.
Clearing House Association approves the
principle announced by the President
of the United States of strengthening
the capital structure of banks through
out the country by the sale of preferred
stock and or capital notes as one OF
the steps toward national recovery and
recommends that every member and as
sociate member of this association give
careful consideration to the advisability
of increasing their capital structure and
10 taking advantage of the opportunity
offered by the Reconstruction Finance
Corporation to purchase preferred
stock and or capital notes"
Other Cities Join.
The Presidents recovery suggestion,
pr recommendation. was made some
time ago. The New York Clearing House
Association was one of the first in the
country to approve the plan and vote
1t full support. Several of the New
York banks have already made plans to
increase their capital structures by very
large amounts.
The Chicago Clearing House also
voted approval and recommended that
Chicago banks adopt the capital ex-
panSion program. Many have already
done SO. Following the action of the
clearing houses in these big money CEN
terS, similar action has now been taken
in nearly all the larger cities in the
country
After clearing house association ap-
proves the general plan, each member
bank or associate member makes its
own decision on selling stock or the
notes to the r. F. c. and increasing its
capital. The idea in a nutshell, so far
rs pushing forward national recovery is
concerned, is for the banks to obtain a
large amount of increased capital, en-
ebling them to make much larger loans
30 business and industry. The policy is
far-reachlng move to benefit credit.
Exchanges of Fourth Liberties.
Acting Secretary of Treasury Nor
genthau announces the total exchange
subscriptions of Fourth Liberties for the
current 1912 year refunding bond issue
were S899, 9,899,2 200 Subscription books
on this transaction were closed last
Saturday.
Mr.. Morgenthau said the Federal Re-
serve banks hold a few subscriptions
pot included in the total announced, but
that these will not materially add to
the total
Approximately s25,O0o,ooo in non
called Fourth Liberties are included in
the totals made public Liberties to the
extent of $1,875 100000 were called in
the operation, but the official announce
ment gave no intimation as to how the
~AASAS4ldllSC0 pOI IlO1 Will De IIdQQleQ.
Treasury Issue Oversubscribed.
The Ss50,000,00O Treasury loan for
December Is refinancing has been
largely oversubscribed, the books being
closed yesterday afternoon at 4:3O al
though subscriptions already in the
mails at that time were to be accepted.
the heavy oversubscription was re-
eeived with considerable enthusiasm
among Washington bankers. 1t was
considered highly encouraging. In
come quarters there had been talk that
the offering might lag. That proved a
larger than expected. Bankers in
washington were also much interested
today in the reports from New York on
call money rates.
Withdrawal of offerings, rather than
any increase in demand for new money,
caused an advance of "a to l per cent
In the official rate for call loans on
Stock Exchange collateral. This was
the first rise in the call money rate
since March and the first time loans
have been officially quoted above "a per
rate declined to "a from l per cent.
Since that time the rate has held at
"a per cent without fluctuation.
The higher call loan quotation at the
Stock Exchange money post had been
forecast by the growing unwillingness of
banks to renew their loans in the out
side market below per cent in the past
few days. Other money rates have like
wise been showing f1rmer tendency.
Today's Trading on Exchange.
Washington Gas SIS, 1860, opened
trading on the Washington Stock Ex-
change today with $500 selling at 103H.
washington Gas 6s, series 3, sold in
small denominations at 1919, 1013a
and 101H.
Washington Railway & Electric As
figured in a $1,000 turnover at 831a
and the remaining bond trading was
confined to Capital Traction 5s. These
bonds recorded three $1,000 transac-
tions at 601a and $500 moved at 81.
Potomac Electric Power 51a per cent
preferred was the only stock that ap-
peared on the board today. In small
lots 1t moved at 1o5. Peoples Drug
Stores preferred is the only issue on
the exchange now being quoted ex-
dividend.
From Baltimore comes the report
that the directors of Emersons Bromo
Seltzer, Inc, have deferred action on
:the quarterly dividends due at this
time. The company's "A" stock is
listed on the Washington Exchange and
has been paying So a year.
Heard in Financial District.
: Chairman Jones reports that the r
r. G. has purchased S425, 100000 in
preferred stock and capital notes from
1928 banking institutions in carrying
aout the Government partnership
plan"
United States Trust Co., New York
has declared the regularly quarterly
dividend of SIS, payable January to
stock of record December 81.
Guaranty Trust Co. has declared the
regular n1llrterlv dividend of S5 nav