Evening star., 1934-05-28
FLEMING SPEAKS
ON BANKS NEEDS
AT WHITE SULPHUR
Continued From Eighteenth Page.)

in passing make this comment, that
while 1t has been the subject of
much discussion, and contains some
objectionable features from the stand
point of practical bank operation, its
general effect has been wholesome,
and IN the main it is wise and
constructive piece of legislation
LAS an aid to the administration
recovery program, the guaranty of
deposits feature undoubtedly served
Its purpose, as did those provisions
divorcing commercial from invest
ment banking, and restrictions on
affillates. Nothing has led the bank
ers of this country farther afield
from true banking than the security
affiliate, and the retailing of securi-
ties was never a proper field for COM
mercial banking, and had much to
do with the general condemnation
visited upon bankers"
The most serious problem confront
ing the banks of today, Mr.. Vass as
serted. is to obtain income, and in no
line of business is it so true as of
banking, that an institution to be
safe must be profitable.
With no high yield use for money
in sight. the price paid for deposits
must come down, ana Improbable
business must be made to pay or be
eliminated.
The National Recovery Admins
tration has not as yet sanctioned any
schedule relating to the analysis of
accounts, but throughout the country
those banks which have analyzed ac-
counts in the past and made service
charges where balances were not COM
penSating, have continued to do so
on their own initiative or by clearing
house rule, and without the sanction
of the National Recovery Admins
tration
Whatever eventually comes out of
the attempts to complete the fair
trade practice provisions of the bank
ers' code" Mr.. Vass concluded, "the
danger of being choked with un-
profitable accounts has been brought
home to every banker in the coun-
try. and we may look for a more in
telllgent understanding of the factors
that insure fair competition, thereby
reducing to minimum the solicita-
ton of business on a basis which
cannot but result in loss"
Strengthening of Banks.
President VaSs further declared
that perhaps the most outstanding
feature of the administrations recov-
cry program to date has been the
purchase by the Reconstruction FL
nance Corporation of the preferred
stock or capital notes of banks for
the purpose of strengthening the
banking structure of the Nation to
enable the banks to meet all legiti-
mate demands for credit
Alter referring to the coming ma
tonal conventions in Washington of
the American Bankers Association
and the American Institute of Bank
ing, Mr.. Vass closed by praising his
associates for the work accomplished
IN the association during the year.
Corcoran Thorn. president of the
American Security g. Trust Co., dis
cussed Some Trust Department Prob
lens AS nearly all the banks in
Washington now maintain trust de-
partments, his remarks we're of special
value.
Mr.. Thorn discussed the type of in
vestmentS to which trust funds may
be applied, from both the standpoint
of safety and of yield. Trust business
IN the banks in recent years has gone
ahead by leaps and bounds and with
all this expansion has come new and
difficult problems. The Washington
banker gave his views on what fees he
H. lo~
various types of service. Other vital
points in trust management were con-
sidered in detail, his address teeming
with progressive suggestions.
Eilleary G. Hoskinson, vice presi-
dent, Riggs National Bank, addressed
the convention on Financial State
ments of Borrowers He called the
progress made along this line in the
past Is years most remarkable. Previ-
GUS to that time most banks made
large loans without even asking for
financial statements. The officers
based their loans on the fact that they
knew the customers personally, knew
they were honest and accepted what
they said about their business.
In recent years the United States
Treasury has been stressing more and
more the Importance of all banks re-
quirihg financial statements from bor-
rowers who ask for substantial loans.
Bank examiners are instructed to in
quire into the financial standing Of
the borrowers. and statements. care
fully audited, are being asked at stated
periods. The new methods have
brought about a great reduction in the
risk on loans, Mr.. Hoskinson said.
President Vass appointed Fleming.
Corcoran Thom, H. H. Mckee and
NJ. D. Rosenberg members OF the
Resolutions Committee and Mr..
Fleming, Victor B. Deyber, c. H. Pope,
Ord Preston and J. Frank White as
the Nominating Committee.
In the first completed sports event
of the convention the Pop Fleming
golf cup was won by Ord Preston,