Evening star., 1937-02-17
GREAT CHANGES
! IN BANKS CITED
Economic Policy Commission
of A. B. A. Sees Shift
in Activities.
BY EDWARD C. STONE.

more general application of service
charges, expansion in personal loan
activities, increased financing Of in
stallment sales and more attention to
loans on real estate, according to an
analysis of the banking situation just
made public by the Economic Policy
Commission of the American Bank
ers' Association.
The new methods have been adopted
to supplement earnings from tradi-
tional classes of loans and invest
mentS. Shrinkage in the volume Of
commercial loans, decrease in bank
loans in the business life of the Ma
ton and the drop in the yield on
bank earning assets are fully dis
cussed by the commission. Leading
up to its final conclusion, the COM
mission says:
Total deposits of the commercial
banks expanded from $4,000, 100000
in 1888 to nearly S35,000,0 100000 in
1885. This was not attributable to di-
rect loans to industry and commerce
by banks, for such loans showed a
large contraction. The main factor
was increase in the public debt. The
proceeds of Government borrowing
from banks and other investors were
disbursed for relief and reconstruction
expenditures and in loans to a di-
versity of interests through Govern
ment checks which came back to the
banks and created deposits
Dearth of Commercial Loans.
"Concurrently with the Government
activities, there continued to be an
acute lack Of commercial loans aris-
ing from private industry and trade
as we'll as a dearth of new corporate
financing in the capital markets. AS a
result of these various circumstances
the estimated aggregate commercial
loans of the commercial banks consti-
tuted little less than 5 per cent of
the Nations total formal credit struc-
ture.
Since 1929 there have been marked
decreases in the yields on all classes
of bank earning assets. A rough in
dex shows the composite return in
1929 was 5.76 per cent. In 1888 it
was All per cent. BY 1885 it was
down to 3.11 per cent In this latter
period there were also. in respect to
the investments of the commercial
banks, a marked concentration in
United States Government securities
which return the lower yields.
1T is our opinion that it would be
preferable and beneficial that the
economic activities of the Nation
should return to a larger extent to
methods again productive of CONNER
clal credit. However, in view of the
developments described, it is wise for
the banks to adjust themselves to
operations which will give them salts
factory earnings on the basis of the
Nations business as it is now being
conducted"
Traction Bonds at New High.
Capital Traction IS sold on the
Washington Stock Exchange yester-
day at Sc, a new high mark for the
present year. The best price to date
had been 9512. New interest is also
being displayed in the Potomac Elec-
trio Power 3A per cent bonds. First
1887 sales in these bonds have oc-
sold Monday at l04l2 and yesterday
at 10412 after opening at 104 Very
few are being offered at any price,
exchange members state.
The New York Stock Exchange has
issued notice of the proposed transfer
of the membership of William B.
Hibbs, deceased, to w w. Spaid, gen.
art mon in I0n nf
& Co. Mr.. Spaid is the active head of |
the company, has been a leader in |
the brokerage business in Washing |
ton for many years and is former |
president of the District Bankers As |
sociation. Mr. Hibbs, who died about |
a month ago, had not taken an active
part in the business for several years. |
Underwriters Hear Bendiner.
Irwin Bendiner, New York Life In
surance Co. agent from Philadelphia, |
addressed the District Life Under
writers Association at the February |
luncheon this noon at the Willard
Hotel President L. A. Riggles pre-
sided at an unusually largely attended |
meeting.
Chairman Jesse H. Jones of the Re- |
construction Finance Corp. has Or
ganized Disaster Loan Corp. to make
loans in the flood areas. Interest will |
be 3 per cent with a waiver for the |
first four months. Not over S20,000,000 |
Is to be loaned.
About IS Swift & Co. employees in
Washington will get vacations this
year with pay, Manager A. H. Thomp-
son reports. He adds that all work.
ers having two years or more OF con-
tinuous service will receive one weeks |
vacation with pay, those who have
been with the company five years get |
two weeks vacation. A three-week
vacation period with pay is allowed |
women with Is years steady employ
ment and men with 20 years service. |
Rural Retail Sales Improve.
Daily average sales of general mer-
chandise in small towns and rural |
areas in January were about 101a |
per cent higher in dollar volume than |
in the same month year ago, the
Commerce Department estimates.
Sales for the year 1896 were 151a |
per cent above those for 1885, today's |
report adds.
Total sales of chain drug stores in |
1886 were Sc per cent higher than |
in 1885, according to preliminary es-
Inmates of the Bureau of Foreign and !
Domestic Commerce. The greatest |
gain was shown by fountain sales, |
which were 1873 per cent higher.
The Treasury Department today |
announced another offering of $50,-
100000 Treasury bills, dated February |
"a and maturing November "a, 1887. |
Tenders will be received up to 2 pm. |
Friday.
Noted i'm Financial District.
Net income of the Chesapeake &
Ohio Railway in January showed a
drop of more than $1,000,000 on ac-