Evening star., 1938-06-25
FLEMING PRAISES
NEW BANK RULES
Proposed Changes Should
Aid Small Business Firms,
Banker Declares.
BY EDWARD C. STONE.


communities all over the United
States; perhaps not so useful to Wash
ington because the Capital is not an
industrial city.
Such information as has come to
me relative to the proposed changes
leads me to the conclusion that the
changes are sound and step forward
In bank examination, said the former
president of the American Bankers
Association today.
Briefly, the Government proposes to
allow small business concerns to issue
bonds and sell them to the banks
Underwriting syndicates are not will
ing to handle these small bond issues
as public offerings or to take the
trouble and expense to register them
with the Securities and Exchange
Commission.
This investment provision in the
regulations issued by the controller
of the currency should be helpful.
MIR. Fleming asserted. The banks will
take the bonds If they have sound
security behind them and can be ade-
ouately amortized within a period of
10 years.
Credit Depends on Demand.
Asked if the new proposals will
mean that the banks will be able to
extend great deal more credit to
business, the Washington financier
replied:
Banks throughout the country have
been ready and willing to extend
credit to all worthy applicants on
liberal terms. In my judgment. the
fault does not lie with the banks,
the public just does not desire to
seek the money available for hire
Banks are in splendid condition to
make the credit available to the pub
lie. but it is up to the public to apply
for it and be in position to show a
satisfactory condition, for it must be
recognized, of course, that the banks
are lending their depositors' money
and every loan must constitute a good
business risk"
Asked if the banks in the Capital
would be interested in taking bonds
or notes that might be offered by
small business concerns. to be paid
off in a reasonable time, Mr.. Fleming
said:
Yes; provided, again. that the busi-
ness can show a satisfactory condition
end a reasonable certainty of repay
ment is evidenced. However. it must
be realized that ours is not an indus
trial community: the first business of
Washington is government and. sec
ondly, the development of real estate,
so that there is not likely to be as
great demand here as there might be
in industrial or manufacturing COM
munities'
The Riggs Bank president was asked
If the liberalized bank examining rules
are among the chief reasons for the
recent amazing advances in the stock
market, because of the effect they
may eventually have on business. In
dicating that he believes the market
advances due to other causes. he said:
II do not believe the advance in the
market is occasioned by any change
In bank examining rules, as it is my
understanding there is no change in
the rules concerning marginal require
ments for loans. Furthermore, do
not believe the marginal requirements
on loans are retarding influence at
the present time"
In conclusion. however, Mr.. Flem-
ing said that he considered the sharp
upturn in the New York stock market
during the past few days as encourag-
ing
Potomac Power Net Lower.
Net income of the Potomac Elec-
trio Power Co. in May totaled S354,-
1O09l. a decrease of S58.2l7.50 from
May, 1887, or IA per cent, according
to the monthly statement filed with
the Public Utilities Commission.
Operating revenues totaled 81 .201,-
1855, gain during the month OF
S28,300.77. Operating revenue deduc-
tions for expenses showed much
larger increase. totaling $755, 48,
q rise of s69,972s7.
Net operating revenues amounted to
$445,34418 in May and deductions
from income for interest and other
purposes totaled SOL ,4O3O3, which was
$s.96812 more than taken out in
May, 1897.
For the first five months of this
year the Potomac Electric Power Co.
reported operating revenues of s6,257,-
600. a gain of s143,138.24. Operating
expenses went up still faster, deduc-
tions requiring s3.905, ,17467, an in
crease of S354,21465 or over 9 per
cent.
This left net operating revenues of
$2,352.515.33, down s21l,076.4l from
the like period year ago. Operating
expenses were higher, depreciation was
higher but taxes were lower by $l5,55l.
all deductions leaving a net income
for the five months of $l,S76. .700.61. a
decrease of S29e,2e426, the report
showed.
Transit Earnings Also Down.
There was a moderate falling of
In Capital Transit net earnings in
May. against the like period in 1887,
the reported filed with the Utilities
Commission disclosed. Net operating
revenues for May amounted to $685.
440.S3, an increase Of S13.025.46.
At the same time operating expenses
CdllSQ lOT SOoO,Ooo.o' up 01'oAooA'
Taxes we're also s7,488.98 higher.
reaching s85,3ss.62. Depreciation
amounting to slO2.26629 was sl0,-
O36.67 higher than in May. 1887. This
left an operating income s9,3l4 lower
than last year, or a drop OF 8.8 per
cent.
Deductions from gross earnings to-
tailed 58,92694, an increase of $2,-
606.42, leaving net income for the
month of $40,7l0.36, in comparison
with s52,33137 in May. 1887, or q
decrease of $1l,62l.ol. Revenue pas
sengers during the month. numbered
13,9o2,110, a drop of 442. 1888 from May.
1896. and a percentage change Of 3
per cent.
Capital Transit also filed the report
for the first five months of this year
which revealed operating revenues of
$4,7OO,527 80, an increase of 81, ,075.92.
At the same time operating expenses
III