Evening star., 1939-01-30

On December 81
last had moved l1asA sSEas
still higher to pr.s,or p.,ano
271.375, a gain ~ '
during the year of 10,493 savings
accounts.
At the end of 1888 the national
hank group held 108,520 savings
accounts, the savings banks carried
TO296 and the trust companies
o2.554 accounts of a thrift nature.
The record is considered partlcu-
larlv interesting in view of the mod
est interest rates the banks now pay.
Savings deposits in the Capitals
banks on December 81, 1887, totaled
s99,O580O0, by September B, 1888,
had dropped to S97 ,465 900, but by
December 81, 1898, had advanced to
sl0O. 1863 900. The national banks re-
ported SAL ,371 900, savings banks
s14,274OO0 and trust companies $44,-
$4,000, the highest amount in the
three groups.
Investment Changes Small.
The controllers analysis shows
comparatively small changes in loans
end investments during the year.
Total loans and investments at the
end of 1887 amounted to S239 $685.
600. had declined to S235 $4,000 by
September, 1888, and by the end of
the year had moved back to $685.
$4,000, or slightly lower for the II
months
Washington bank assets, however,
made substantial progress. Total
assets on December 81, 1887 stood
at 1863 ,246, ,000 at 1918 l67 900 on
September %. 1888, and had
mounted to 1898 8045 900 on Decem-
ber 81, 1888. This was a gain OF
Sl9,799 900 for the year.
AS noted recently, aggregate de-
posts, both demand and time,
reached an all-time high mark on
December 81, 1888. The controller
reports 1922 652 900 on deposit in
District banks on December 81,
1887, s330625 900 in September
1898. and s341 500 900 by the end of
the year.
Total liabilities naturally moved
up along with the increase in de-
posits. The report says the banks
had a total surplus of S14,4200
at the end of 1887. of s14.727OOO in
September and Sl5.873000 at the
end of 1888. Undivided profits
moved from s7,9190OO to s8450,000
during the year. Reserves totaled
S1,636,OOO at the beginning of the
year and S1,750,O00 at the end, the
controller says. his whole survey
rejecting steady growth through
out 1888.
Banks Change Loan Methods.
The extension of intermediate
volumes of mortgage loans on a
plan of scientific amortization" and
many types of personal loans or
consumer credit are means by which
banks are adapting themselves to
the changed conditions under which
banking must operate as a result OF
altered business habits and political
philosophy of the country it is stated
in study of The Earning Power
of Banks just completed by the
Research Council of the American
Bankers Association and announced
by Leonard P. Ayres, chairman Of
the council.
Within the banking structure
itself the most important modlflca-
tons which have occurred are in
the loans and investments of COM
mercial banks the study says.
Loans have been largely replaced
by investment and there have been
radical decreases in the yields which
may be obtained from these modi-
fled earnings assets. Formerly loans
of all types composed over 10 per
cent of aggregate earning assets, in
vestments less than 80 per cent.
To-day all loans are less than IS
per cent and investments more
than 55 per cent. Strict commercial
loans formerly constituted over so
per cent of total earning assets.
They now amount to little more
than 20 per cent. Up to 1929 the
composite gross yield of the bank
dollar from loans and investments
was nearly per cent. Today it is
less than per cent
personal Loans increase.
Practically all banks interrogated
reported that ti,cir volume of per-
sonal loan business had been stead
lily increasing and that there had
been no evidence of any increase
in the percentage of delinquency
the study states.
The development of facilities for
scientific appraisals and the appli-
cation of systematic amortization
plans for first mortgages secured
by real estate have brought large
volumes of this class of loan within
the scope of sound operations by
commercial banks it reports.
"While the total amount of real
estate loans in their earning assets
has not increased greatly in recent
years, there has been substantial
expansion in lending in this field
by commercial banks on the basis of
modernized and sounder mortgages" "
1t says.
The study reveals that the down.
ward movement OF interest rates has
been "conspicuously consistent"
InrOuSnOuI llle "oilu anu llldt d
survey by the research council
showed this movement to be typical
in its effect upon banking in %
chief nations with the exception of
France, for which comparable data
is not available.
Pepco Preferred in Demand.
Potomac Electric Power 5la per
cent preferred stock drew all the
attention on the Washington Stock
Exchange today, three 10share and
one 5-share sales taking place at
115i2. The stock sold the other day
at ll6.