Evening star., 1935-08-21
1885 ACT SATISFIES
. CAPITAL BANKERS
Passage Believed Helpful,
! With Most Controversial
+ Points Ironed Out.
BY EDWARD C. STONE.


passed by Congress. 1t is not the re-
suit of snap Judgment, the long and
heated arguments having ironed out
the most controversial points into
measure that is now meeting with
very little unfavorable comment. Its
passage was taken here as a matter
of course.
The most vital points in the new
bill will become largely matter of
administration. Subject to approval
of the Senate, the President will have
the power to name an entirely new
board of governors for the Federal Re-
serve Board, on February /, 1886,
should he see fit to do so. But bankers
here do not believe he would think
OF making such a sweeping move at
one time
The new members of the Reserve
Board will serve for 14-year terms at
a salary of $4,000 year. They will
compose the new supreme court of
finance" and will have much more
centralized responsibility than the
present board has. Gov. Eccles has
insisted that the Washington Reserve
officials should have more power and
be held more accountable for the
handling of all banking and credit
matters.
Real Estate Loans Allowed.
On the side of recovery, sponsors of
the banking bill lay most stress on
two provisions: First, that which per-
mits banks to make real estate loans
up to go per cent of the value of the
property and in aggregate amount
equal to their capital and surplus or
so per cent of their time and savings
deposits, whichever is greater.
Second, that which permits Federal
Reserve banks to lend to member
banks on their notes secured to the
satisfaction Of such Federal Reserve
Bank" at a rate of interest one-half
of l per cent above the rediscount
rate.
Thus banks, in period of eX
tremely easy money, are permitted to
go into the long-term realty lending
field, and encouraged to do so by the
prospect that if they need cash in a
hurry they can get it on their note
secured by real estate loans in ac-
eordance with the new law.
Under the provisions of the new bill
the annual report of the Board of
Governors" of the Federal Reserve
System will become one of the most
important and significant documents
in the financial world
Credit control under the bill as
finally agreed to is shared by the board
of governors and the Reserve banks
with the Federal Deposit Insurance
Corp. to the extent that the latter
controls interest rates on deposits Of
non-member State banks under the
insurance fund.
Business Holding Up Well.
Building activity in the fifth Fed
eral Reserve district, including Wash
ington, is practically double that Of
year ago, according to the Federal
Reserve Bank of Richmond, the situa-
tion being of special benefit to labor
and to building supply houses. Con-
struction in % cities in July was
valued at s4,595,636, compared with
S2,310,659.
Agricultural conditions continue at
a high level and bumper crops are
now practically assured. Retail trade
continues to expand. As already re-
ported sales for the first seven months
of this year were per cent better
than year ago.
Cigarette production in the fifth
district is reported as continuing at
high rate, with no signs of any let-up.
Output of the factories is well ahead
of the production figures for the same
period last year.
Reports from Atlanta indicate the
same business pickup in the South.
Retail trade has moved forward in the
sixth district in the last few days be-
cause Of special sales. Real estate |
activity has increased. Rents have
advanced per cent.
Bankers Join Soil Drive.
Under the title Protecting Invest
ment Values in Land" the American
Bankers Association Agricultural
Commission has published a booklet
dealing with the conservation of soil
resources as pressing national prob
lem.
Careful estimates indicate that !
750,000,000 tons of soil, suspended and |
dissolved, are carried off to the sea
each year by running water" the |
commissions book declares. AN |
equal amount removed from it's source
Is left en- route. This means total |
Of 1,500, ,000, 900 tons, equal to approx |
mately ton for each acre of land in |
this country. The Soil Conservation |
Service estimates that already 35,-
100000 acres have been practically
ruined.
There are 100000 more acres
that have lost the valuable topsoil, |
and it is estimated that still another
100,000,000 acres are being converted
into marginal or submarginal land, |
bringing disaster to those trying to
exc out a living from erosion-en-
feebled soil and threatening ruin to
the next generation, since these de-
structive forces are going on at an
ever-increasing rate"
Junior Bankers on Cruise.
About 200 members and guests of
Washington Chapter, American In
stitute of Banking, will cruise down
the Potomac this evening on the first
Summer outing of the kind.
The Chesapeake & Ohio Railway
reports net earnings OF Sl.94 snare
on the common stock in the first seven
months of 1885, against S207 year
ago. The quarterly dividend on COM
mon and semi-annual 1925 dividend
on preferred have just been declared.
j. G. Hopkins, Washington repre-
sentative of the Lincoln National Life
Insurance Co., has just been notified
by his home Office in Fort Wayne, Ind,
that he ranked third in volume of paid
business for the month of July. Mr..
Hopkins honor was won in competi-
tion with more than 1900 other sales
men.
Miles H. Quail, with Y. E. Booker &
Co., and member of the Washington