Evening star., 1934-06-20
REDUCED SAVINGS
RATE ANTICIPATED.
IS TRANSACTIONS ON THE NEW YORK STOCK EXCHANGE
Interest Cut to 2I2 Per Cent
Mark Laid to Low
Profits.
BY EDWARD C. STONE.

Cutting of interest to be paid on
savings or time accounts in Washing
ton banks to a maximum of 2l2 per
cent, announced by the Washington
Clearing House Association late yes
terday, had been anticipated in bank
ing circles for some time. The rate
has been per cent.
The clearing house announcement
made by Chairman H. H. Mckee
stated that the continued lowering OF
rates at which money can be en-
ployed and the lack of demand for
commercial and collateral loans had
caused the reduction.
The action of the clearing house
also provides that upon deposits re-
ceived on and after July /, 1884, this
maximum rate of 2l2 per cent may be
paid only on deposits up to $4,000 and
that on the excess between 5000 and
$4,000 the rate of per cent may be
paid, but above $4,000 a rate not
higher than IL per cent may be
paid"
The clearing house chairman stated
that it would be the organizations
policy to adjust from time to time
the rates of interest paid on savings
ard time accounts in accordance with
the yield that can be obtained by the
employment of loanable funds.
The statement called attention to
the fact that the rates going into
effect on July l will still be higher
than those paid by other large cities
not far from Washington. 1t will be
recalled that Baltimore reduced saw
ingS account interest rates not long
ago and that Richmond took similar
action. So did Philadelphia.
Interest Rates Very Low.
Interest rates are now the lowest
they have ever been. AS one banker
said today. if the banks can't earn
more than per cent on savings
funds, they can't pay depositors 3
per cent
Under present conditions rates have
had to come down in the banks and
trust companies all over the country.
They can't pay what they don't earn,
a self-evident economic truism. In
New York and some other cities the
banks have not only cut interest rates
on savings, but have also limited the
amounts which they will accept on
deposit
The matter of interest rates was
fully discussed at the recent conven-
ton of the District Bankers ASsocia-
ton at White Sulphur Springs. Early
action was clearly indicated at that
time The chairman's reference in
1,ic rot RI ho nf ri
ing interest rates from time to time
in the future is more important than
might at first appear Any sudden
demand for loans might enable the
banks to return to the former rates
in a comparatively short time.
Every bank wants to pay as high
an interest rate as it reasonably can,
a Washington financier said today.
Following the meeting OF the Clear
ing House Association yesterday, the
Executive Committee also held ses-
sion. This committee in addition to
Chairman Mckee, includes Robert V.
Fleming, J. Frank Stryker, C. F.
Jacobsen and George L. Starkey.
Victor B. Deyber is the secretary.
Bankers Honor Associates.
The luncheon group of the District
Bankers Association paid a high
tribute to two of its members at
meeting this noon at the Willard, the
new president, F. p H. SiddonS, pre-
siding.
Handsomely framed copies of reso-
lutions passed at the White Sulphur
convention were presented to George
o. Vass, last years president and to
Robert V. Fleming The Vass resolu-
tions thanked him for the splendid
manner in which he conducted the
associations affairs during a most
difficult year.
The Fleming resolutions expressed
the gratitude of the association for
the valued service rendered, in spite
of the extra demands placed on his
time by the American Bankers ASso-
citation in connection with national
legislative and other matters, as well. i
as unlimited other demands on his
time and energy.
Both bankers were greatly surprised
and pleased and so expressed them
selves. The group also passed a reso-
luton at today's meeting lauding Mr..
Vass for the very successful handling
of last years luncheon meetings.
Bank Declares Dividend.
Directors of the American Security
& Trust Co. at meeting yesterday
afternoon declared a 2 per cent divi-
dend, payable July 10 to stock of
record June 80.
Ord Preston, president of the Union
Trust Co., has returned from attend
ing his class reunion at Yale, where
he has son in the Junior class. He
also visited a son at Andover Acad-
emy Mr. Preston found New England
conditions steadily improving.
Maurice Otterback. chairman of the
board of the Anacostia Bank who is
recovering from an operation, received
a floral remembrance by members of
the District Bankers Association.
The safe deposit section of the
Bankers Association will hold its
annual election this evening and name
officers for the coming year
The provision of the banking act
of 1888 increasing the amount of
stock ownership for the qualification
of directors. which was to become
effective on June Is. has been re-
pealed, much to the satisfaction OF a
host of opponents.
Capital Traction Higher.
Capital Traction stock sold up to
2434 on the Washington Stock Ex-
change today. after opening at 24l2.
Washington Railway & Electric pre-
ferred came out at 1894 on two sales,
while Mergenthaler Linotype changed
hands at 2234 and %.
After CALL Potomac Electric Power
5i2 per cent preferred stock was again
strong. Ten shares sold at 1lll5 and
10 more at 1115s. Both the sig per
cent preferred and the 6 per cent
preferred closed with Ill bid. None
offered
Capital Traction IS led bond trad
ing, remaining strong. One $4,000
sale and two $1,000 sales were re-