Evening star., 1938-07-09
RESERVE ADVISES
CREDIT EXPANSION
Board Cites Broader Powers
Under New Examination
Rules for Banks.
BY EDWARD C. STONE.


urge banks to broaden their credit
facilities at once under the new ex-
animation and investment rules
adopted by the board in conjunction
with other important Government
agencies.
The June Federal Reserve Bulletin
states that banks should be able to
make loans upon intrinsic value
rather than upon liquidity or quick
maturity" and should buy bonds "in
the light of inherent soundness rather
than on basis of day to day fluctu-
ations"
The chief purpose of the new pro-
gram. the bulletin says, is to "encour-
age the private banking system of the
country to adapt its lending and in
Vestment functions to present-day
requirements of commerce, industry
and agriculture.
1T is designed to afford banks
broader opportunity for service to the
community and for profitable outlet
for some of their abundant idle funds
AS the banks avail themselves of the
opportunity, the necessity will be di-
minished for creation of Government
agencies to furnish credit facilities
which the banks should provide"
The program is based on sound
banking principles, the statement
adds. The banks will be required to
continue the present practice of
charging off losses and of establishing
and maintaining adequate reserves
against doubtful and speculative loans
and securities.
Broadening of the opportunity for
small and medium sized business con-
Germs to obtain credit from the banks
on a sound basis and relieving pres
Eures that tend to reduce outstanding
credit or prevent extension of new
credit to sound borrowers are termed
the most vital aims in the new regime.
Thompson Elected Director.
Howard E. Thompson was elected
director of the Columbia Building
Association yesterday. succeeding the
late C. Albert White. For the past
Is years Mr.. Thompson has been
associated with the District e. Law
yers Title Insurance Co. He is a
graduate of the National University
and member of the Board of Stew
ards of the Ninth Street Christian
Church.
At the same time the directors ele-
vated William E. Poulton to the posi-
ton OF assistant secretary Mr.. Poul-
ton, a graduate of Benjamin Franklin
University, has been in the employ of
the association for eight years and is
widely known in loan association work.
Hotel Bonds Realty Leaders.
In the declining securities markets
of the last several months. real estate
bonds have lost only small portion
of the gain recorded by this type of
security since 1888. charts prepared
by Burr e. Co., Inc, revealed today:
An encouraging upturn has bSsen noted
since May l.
OF the major types of properties
covered by the index, hotel issues have
shown the best record for the first six
months of 1888, recording a gain of
Al per cent. Theater issues have reg
istered nominal gain of about l per
cent, while losses for the six-month
period have been recorded by the Burr
index for the other types. Apartment
hotel issues show loss of 81 per
cent, Office building issues are down
As per cent and apartment house
issues decreased 1.3 per cent for the
first half of 1888 The entire $50
issues have gone off 3.5 per cent.
In spite of the small losses registered
for the first half of 1885, the $50
issues have an average market value
considerably better than double the
low point reached for the Burr index
issues on April l. 1888. when the aver
age bid price was 16.7.
In the 5l2-year period from Janu-
ary /, 1888, to July /. 1888, apartment
house issues have shown the best per-
centage of gain of 1914 pc cent, in
creasing from an average bid of 1913
to 37.7. The next best gain has been
recorded by hotel issues, going up from
1874 to 1873 for gain Of 148 per cent.
Office building issues have shown the
smallest profit, increasing 81 per cent
from a January !, 1888. price of 25.8
to the current price Of 404
Patronage Dividend Voted.
Southern States Cooperative has
declared a cash patronage dividend
of 11sc per pound, or $50 ton, on
purchases OF arsenate OF lead by
patrons during the spring season
ending June so, according to w. G.
Wysor, general manager, Richmond,
Va
Among the largest patrons are DR..
A. B. Eagle, Martinsburgh, w. Va,
whose dividend amounts to S127.20,
and Cecil Wood, Hedgesvile. w. Va,
whose dividend is s27O. Patrons in
receive dividend of $l,028.22, Mr..
Wysor said.
Southern States has the organized
and active support of its retail dis
tributing agencies and of the State
horticultural societies in Virginia,
West Virginia and Maryland in it's
successful venture of saving farmers
money
Municipal Financial Rises.
State and municipal financing for
the month Of June aggregated Sl76.-
745,475 as compared with $l1O.554,331
in June, 1887, according to The Daily
Bond Buyer. The total for the first
six months of 1898 is $723, ,3O8.511, as
compared with s621, ,629,OO1 for the
same period last year.
During De month of June PWA
financing totaled $26.369,OOO, as COM
pared with S1,183,100 PWA finan-
cling for June, 1887. RFC finan-
cling during June, 1898. totaled S.
$4,000, as compared with $l,175,5OO
during June last year.
Store Sales OFF Per Cent.
Department store sales in June in
the Fifth Federal Reserve District,
which includes Washington were 7
per cent lower than in June, 1887, the
Federal Reserve Board reported here
today. For six months sales were