Evening star., 1933-04-01
ALL BANK DEMANDS.
MET BY RESERVE
Greatly Improved Sentiment
Il, Noted in Fifth District
E Review of Credit.
BY EDWARD C. STONE.

Remarkable expansion of credit by
to meet the extraordinary demands
from commercial banks in the fifth dis
trict just before the recent bank holi-
day, is revealed in the monthly review
of credit. business and agricultural con-
ditions, made public today. The Rich
mond bank also states that since the
release of the banks from the Sestric-
tions imposed during the moratorium
there seems to have been "a remark
able revival of confidence"
Deposits in 48 reporting member
banks dropped nearly $38000 900 in
three weeks preceding the holiday, caus
ing the banks to draw upon their re-
serve accounts for S15,000,000, and to
increase their rediscounts at the re-
serve bank by about $33, ,500,o00 in the
same period.
To meet the demand for currency,
the Federal Reserve Of Richmond in
creased its circulation of Federal Re
serve notes by STA 100000 between
February Is and Marcn IS, tripled re-
discounts for member bGni-s and in
creased investments in zen market
paper, most of which was taken from
member banks somewhere in the Re-
serve System, by nearly s19000,ooO.
Sharp Gains in Deposits.
Following the holidays, the bank said,
deposits everywhere were reported far
in excess of Withdrawals. and Federal
Reserve notes in circulation and redis-
counts at the reserve bank PROMPTLY be-
gan to decline Immediately after banks
resumed customary functions.
Business in. the fifth district in Feb
ruary, the bank reported, was in sea-
sonal volume during the first half of
the month, but in the second half there
i was a recession due principally to grow
ing uneasiness about the banking sit
uation. When banking moratoriums,
which had started elsewhere, reached
$ this district and Maryland banks closed,
many people in other fifth district States
began to question the ability of their
banks to meet Withdrawals. Heavy
Withdrawals of deposits began soon
after the middle of February the bank
said, boarding increased enormously,
and people started conserving the cash
they had, all of which adversely affected
trade.
Commercial failures compared IA
vorly with those of February last year,
in number, but liabilities involved in
failures in February, 1888, were the Sec
ond highest for any month on record.
Employment conditions registered no
improvement, and became worse at the
end of the month and early in March.
Textile Activity at High Level.
Coal production in February totaled
2.8 per cent less than production of
February, 1882, but on daily basis the
1888 month made the better record,
February, 1892, having an extra day.
Textile mills in the fifth district
maintained operations at recent levels
in February, but did not use quite as
large a percentage of total cotton con-
sumption for the month as they did
in January, when they used slightly
more than half the cotton used in the
United States.
Spot cotton prices rose between the
middle of February and the middle of
March. Tobacco markets all closed in
February after selling a small crop
for moderately better prices than the
1881 crop brought. Farm work ad-
vanced seasonally, and the weather was
favorable for both growing and future
crops.
A very small number of building per-
mits was issued and relatively few con-
struction contracts awarded, although
the contracts awarded exceeded those
of February last year in total valuation.
Investment Shares Increased.
A. S. Goulden & Co., Woodward
Building, announce that the trustees of
Massachusetts Investors Trust have in
creased the authorized shares from l.
100000 to 100000. There are now
980, 900 shares outstanding.
The trustees feel that the low prices
prevailing since the first of the year
may not recur and have increased their
investments until cash funds have
reached the lowest point since Septem-
ber. 1881. The firms funds are in
vested in dividend paying common
stocks
During the past week the investment
trust paid quarterly dividend of 20
cents per share. This is about the same
figure as paid in other dividends during
the past year.
Maryland Bank Gets License.
A license to reopen as of April has
been granted to the First National
Bank of Aberdeen, Md, statss the
Richmond Federal Reserve Bank.
A total Of 278 member banks are now
operating under license in the fifth
Federal Reserve district out of 388. All
but IL State banks controlled by the
Maryland State Banking Department
are exercising normal banking func-
tionS.
Virginia Banks in Merger.
The Bank of Pocahontas, Pocahontas,
Va, has been licensed by the Virginia
State Banking Division to resume
normal operations.
Callao State Bank at Callao has
merged with Citizens Bank of Kin
sale, Inc. Kinsale, under the latter's
title. Callao Bank will be operated as
q branch