Evening star., 1934-02-10
DEPOSITS MOUNT
IN CAPITAL BANKS.
Checking Accounts Show
Improvement Along
With Savings.
BY EDWARD C. STONE.

cember 81. Wnlle c1ecklng accounts
have been built up good DEAL there
has been marked improvement in
savings
Several reasons are assigned for the
enlarged accounts. One of the chief
factors, no doubt, is the new deposit
insurance law which went into effect
on January l. Since that time the
Federal Deposit Insurance Corpora
ton has protected all depositors in
approved banks. up to $4,000, and
that includes every bank in the
Capital.
Restored confidence is another i'm
portant reason. Banks stand in
very different light compared with
their status Of year ago. At that
time safe deposit boxes we're bulging
with cash placed there for protec-
tion and emergencies. Most of that
money now is believed to have been
placed on interest
The huge sums put out by the
Government in stepping up recovery
has proved a boon to bank deposits.
This city has had its full share of
these funds, lot of this money now
being recorded in bank pass books.
How to keep these increased deposits
at work is furnishing a hard problem
for the banks While everybody ad-
nits that things are on the upgrade,
the demand for sound loans still lags.
Eventually, the increased deposits
will be put to good use, as expanding
business always means sound bank
loans.
The trouble with many recent loan
that potential borrowers are in need
OF capital, rather than money that
can be paid back at stated periods.
Granting such loans would make the
banks business partners with bor-
rowerS. So they insist on remaining
liquid and in some cases are charged
with being too tight" thus halting
recovery.
So difficult has the loan situation
become in New York that some banks
are limiting savings deposits. The
well-knoWn Bowery Savings Bank is
one of the institutions in this class.
Washington banks however, are prac-
ing no restrictions on thrift ac-
counts" as they continue to mount
toward higher and higher levels.
Why Business Is Better.
Eight reasons why business is better
are listed by the magazine Sphere as
follows:
l. Reviving confidence in the sound
ness Of the dollar.
2. The addition of about S3,0OO,-
100000 to the gold base and Of ap-
proximately 81 .0O0. 100000 (to be in
creasedD to the banking capital of the
Nation.
3. Expenditure BY the Government
Of between $4,000, 100000 and $4,000
900, 900 during the current six months.
4. The probability of diminished
major crops, due not only to the
Governments restriction program but
also to the Generalization of farm
labor by the c. w. A.
5. Pressure of delayed improve
ments and requirements.
6. The better distribution of wages
among the unemployed.
Z. Sterilization of rural and urban
real estate values through Govern
ment mortgage refunding operations.
8. Increasing foreign trade.
Near Term Outlook Favorable.
Business in general has passed the
turn of the year under conditions that
may fairly be regarded as definitely
favorable In their near-term future
implications, says the Guaranty Trust
Co. review. Fluctuations in recent
weeks have been strongly affected by
the usual seasonal influences, but in
dictions of continued improvement are
not lacking The holiday season ap-
pears to have been the most active in
several years, pointing to an increase
In purchasing power and consumer
demand: and similar conclusion is
warranted by the public response to
the annual automobile shows. Some
further time will be required to
gauge the real significance of week
to-week developments since the be-
leinning Of the new year, but in gen.
eral it appears that the gains recorded
IN the closing weeks of 1888 have been
we'll maintained.
The outlook, Of course, Is intimate
y related to developments at Wash
'hgton, and particularly to the two
highly significant steps taken by the
Government this month-the project
TO expend billions of dollars of pub
lie funds on relief and recovery, and
uttlolOll W ICuuNC Vic Solo NOli-
tent OF the dollar by at least 40 per
cent, the review adds.
Cleaned in Financial District.
r. Stanley Holland. assistant trust
officer of the American Security &
Trust Co., will attend the MidWinter
trust conference to be held in New
York next week.
Maurice Otterback, chairman of
the board Of the Anacostia Bank, has
gone to Florida to remain until the
latter part of March.
Three bank presidents were re-
elected to the board of the Norfolk
&, Washington Steamboat Co-Wil-
Liam D. Hoover, National Savings &
Trust Co.; George L. Starkey, Ma
tional Bank of Washington, and
George P. Sacks, Bank of Bethesda.
The Federal Reserve Bank of Rich
mond has reduced its rediscount rate
from 3l2 per cent to 3 per cent, al
ready effective. This action follows
the cut in the New York rediscount
rate few days ago.
D. C. Broker House Comment.
Board rooms were iammed to the
doors today when the New York
Stock Market opened. Stocks opened
considerably lower.
Many brokers thought cancellation
OF the air mail contracts had more
to do with the weakness than the
exchange regulation bill in Congress.
1t was explained that the proposed
legislation is not to go into effect
until next October.
Brokers admit that some of the
proposed restrictions should have been
put into effect long ago. Other pro-
posals they consider too drastic. 1t
will be almost an endless job to file
80. many corporation reports with the
Federal Trade Commission, but would
be well worth while if inexperienced
investors are protected from heavy
losses
Stock Exchange members here with