Evening star., 1935-02-23
LOANS INCREASED
BY CREDIT BANKS
Gov. Myers Reports Rise OF
As Per Cent in 1894 in
Total Volume.
BY EDWARD c. STONE.

issued here today by w. l. myers,
governor of the Farm Credit Admin
istration. Total credit extended to
financing institutions and cooper
ative associations in 1884 amounted
to $405, $3.50, compared with $278,-
673,376 in 1888.
OF the total volume of credit ex-
tended during the year $l24,948,53
or about 81 per cent, represented pa
per discounted for privately capital
lied commercial banks, agricultural
credit corporations and live stock loan
companies; $ll3,434,69e, or about %
per cent, represented notes discounted
for the regional agricultural credit
corporations; $110,133 ,809. or 27 per
cent, loans and discounts for produc-
tion credit associations, and $780,
SIG, or IA per cent, loans to farmers
cooperative marketing and purchaS-
ing associations.
Although $1l3,434 699 was advanced
by the banks to the regional agricul-
tural credit corporations during 1884,
substantial part of the discounts
consisted of paper which the corpo-
rations previously had rediscounted
with the Reconstruction Finance
Corp. This Indebtedness has been
reduced by repayments aggregating
S37 7,255,4 ,431 in 1888 and 1926, 1872
in 1884, leaving S38,650,66l under dis
count at the close of 1884. The paid
in capital of the II corporations
amounts to S44,500, 900. Five of these
corporations have repaid rediscounts
with the intermediate credit banks.
Outstanding loans and discounts Of
the intermediate credit banks at the
end of 1884 totaled Sl89,316, 500, COM
pared with $l49,462,95l at December
81, 1888. OF the total amount of loans
and discounts outstanding at the close
of 1884 SCI 1924, ,482, or about 80 per
cent, represented production credit
association loans and discounts; $685.
650,661, or 20 per cent, discounts for
regional agricultural credit corpo-
rations; S55,672 ,295, or about 80 per
cent, credit extended to other financ-
ing institutions. and $33969,l71, or
18 per cent, loans to cooperative
marketing and purchasing associ-
ations.
During the past year the discount
rate Of the intermediate credit banks
has been the lowest in the history of
these institutions. The ready demand
for short-term investments enabled
the banks to lower their debenture
rates from 2l2 to and then to l p
per cent during the last six months
OF the year. AS a result, the interest
charged discounting institutions and
cooperative associations was lowered
to 2 per cent, substantially reducing
the cost of short-term money to
farmers.
Forecast Hints at Boom"
Recovery sums up in a single word
the 1885 outlook as Brookmire sees it.
This recovery should be based upon
the vigorous growth of national in
come, already under way; the liberal
Federal spending, the expansion of
bank credits and the potential de-
mand for goods and commodities
arising out of the long deferred needs
OF consumers.
Progress of recovery is already il
1ustrated by the 1884 new high rec
ords in the sale of cigarettes, radios,
gasoline, electric refrigerators. elec-
tricity for domestic use and in the
demand for Diesel engines. Physical
volume of trade is expanding IN sew
eral countries, gold reserves are in
creasing and international trade is re-
covering.
Brookmire expectations, based upon
past economic and political expert
ence, are that the general revival
should soon gain speed and later be-
come boom. This is what usually
happens at the final exit from pro-
tracted depressions; and it Is more
than ever likely this time because of
the administrators swing to the
right, of the consequent growth of
business confidence and of our huge
excess reserves, the Brookmire Quar-
terly says.
Rediscounts Lower in 1884.
A comparison of the figures in the
Federal Reserve Bank of Richmonds
statement Of condition for January
Is this year with corresponding fig
ures year ago shows that some
marked changes occurred during
1884. Rediscounts for member banks
declined by $3,762,000 during the
year, or approximately 95 per cent.
On the other hand, holdings of
Government securities rose by $25,-
100000 during the year, and the bank
had advances to industry outstanding
on January IS, 1885, amounting to
$l,695,000. These changes resulted in
a net rise of $19,342,00O in earning
assets during the year under review.
Circulation of Federal Reserve notes
rose $6,846,000 during the year, but
Federal Reserve bank notes totaling
$4,518,000 in circulation at the mid
die of January, 1884, were retired be-
fore the corresponding date this year.
Member bank reserve deposits rose
by $34,685,000 during the year, add
( ing further to reserves which were
already in excess Of legal require
ments. Cash reserves of the Federal
Reserve Bank of Richmond rose by
S12,175,000 between January Is last
year and this, but the ratio of re-
serves to note and deposit liabilities
combined declined by sos points.
Investors in Safer Status.
1.-THE investor is in a better posi-
tion now than he was in 1929, for
two reasons" said Ralph T. Crane,
president of the Investment Bankers
ASSOCldLlUl VI f1IllcIlCd, duClI Ccol1lS
bankers
First, We have passed from de-
structive to constructive reform. The
investor can now appraise the situa-
ton and ascertain what he has gained
in all the striving of the last few
years to correct past errors and NAL
practices.
Second, in the investment bankers
code and in the amended securities
act we have set up a machine that
aids and encourages balanced invest
ment, that enables an investor to de-
termine sound program regardless
of styles in securities or the over
enthusiasm or pessimism of public
opinion.
Neither the code nor the securities
act Is designed to prevent the honest
sale of any security, If the investor
Is satisfied that that is what he
wants"
Railroad Earnings Lower.