Evening star., 1940-05-13
!, Low Money Rates May
Become Permanent,
Statisiician Asserts
Reserve Board Expert
Points Out Changes
In Busic Conditions
BY EDWARD C. STONE.

research and statistics of the Fed
eral Reserve Board, suggests in the
May issue of the Reserve Board
bulletin.
DR.. Goldenweiser, reviewing the
recent history of money rates, wrote
that the easy money problems Gre
ated for lenders of money ARE a
part of the necessary readjustment
of the country's economy to funda-
mentally changed conditions"
Pointing out that this country has
passed from an era of active de-
mand for capital with abundant op-
portunities for investments into a
situation in which ever-increasing
investment funds are having diff
Guilty in finding outlets, DR.. Golden
weiser stated that capital "has lost
much of its scarcity value and may
have to be content with more mod
crate returns"
This change in fundamental con-
ditions has far-reaching implica-
tions, not only for investors but par
ticularly for those who are respon-
sible for formulating policies to be
pursued by the Government and by
private enterprise" he asserted.
Two Sides to. Problem.
There are two sides to the prob
lem of money rates, the borrowers
and the lenders. From the point of
view of the borrower the decline in
rates has enabled many debtors to
refund long-term debt at lower in
terest rates, with consequent cas-
ing of many debt burdens, especially
for farm and home owners and GER
tain corporate borrowers. It has
also reduced the cost of borrowing
for business purposes.
"At the same time it has raised
difficult problems for many classes
of leaders. For the banks it has
Increased the difficulty of making
sufficient earnings on the capital in
vested in the business. To meet this
situation, many banks have ex-
banded their field of operation into
bond investments, other longer-term
credit, personal loans, installment
financing and in other directions.
Real Estate Bonds Steady.
Washington real estate bonds
changed very little during April,
the same being true of about 200
Issues in other Eastern cities, ac-
cording to the Amott-Baker Bond
Price Averages.
Hamilton Realty Corp. first IS
closed the month with 100 bid, un-
changed; Mayflower Hotel first IS
stood at 90 bid, off 2 points; Ma
.tional Press Building first 3-5s car
ried a bid of 70, disclosing a gain
of tx points; National Press Adj. :,
Inc, 4las registered 171a, of point,
while Washington Properties, Inc, Is
ended the month at 51Hz bid, down
points, the review states.
The review says that the average
price per ST 900 bond of 200 issues re-
mains at $317 per 81 900. So far this
year these same bonds have in
creased l per cent over the close Of
1899, the report states. Boston real
estate bonds made the best showing.
Upham Lauds National Banks.
National banks today are in as
sound condition as they ever have
been, Cyril B. Upham, deputy con-
troller Of the currency, told the
Kansas Bankers Association.
'"The percentage of classified and
criticized loans is small in relation
to total volume" he continued.
Most of our banks have good securi-
ties portfolios and the number is
small in which net bond deprecia-
ton is of any consequence. The
capital position is, generally speak
Ing, entirely adequate. Earnings
are improving and losses are
smaller"
Mr.. Upham, speaking on Banking
and Bank Supervision" traced the
growth and increasing effect of
supervisory agencies upon banking
and declared: I'm continuing to in
sist that banks keep in sound con-
dition and operate legitimately,
supervisors are protecting the in
terests not only of the public, but
Fifth District Sales Gain.
The Federal Reserve Board an
nounces that department store sales
In the Richmond district, including
Washington, ending May this year,
were per cent ahead of the like
period year ago, compared with a
gain of 3 per cent in the whole IL
districts.
Sales in the Richmond district
for the week ended May 4 were IL
per cent ahead of the same week a
year ago, and for the four-week
period ended May 4 were 6 per cent
better than year ago. In this
period the national upturn was only
per cent.
Philadelphia reported the sharpest
advance for four weeks of any of the
IL districts, 10 per cent. Dallas re-
ported a per cent pickup. Chi
cago and Minneapolis had the. same
advances as in this territory, 6 per
cent.
So far this year, up to May 5,
BAlcS III Ullc NcW VI n AREA die up q
per cent, Boston the same as last
year. Philadelphia l per cent, Cleve-
land 4 per cent, Atlanta 6, Chicago
4, st. Louis S, Minneapolis 3, Kan
sas City /, Dallas 3 and San Fran
cisco down per cent, the review
states.
Loan Leaders on Council.
Six savings and loan leaders were
appointed by the Federal Home Loan
Bank Board today to be members of
the Federal Savings and Loan Ad-
visory Council for the fiscal year
1901. They are:
Joseph H. Soliday, Franklin Saw
ings Bank, Boston; Ernest T. Trigg
of Philadelphia. president of the Ma
tional Paint, Varnish and Lacquer
Association in Washington, D. c.:
Herman B. Wells, president of the
University of Indiana; Will c. Jones,
jr., Of the Murray Co., Dallas; Paul
r. Good, Good &, Simons. Lincoln.