Evening star., 1942-05-25
Banks Show Big Gain
In War Goods Loans
In First Quarter
Rise Of $s9l 900, 900
Revealed in Survey
Of Lending Activity

Loans made by commercial bank.
to finance the production Of orders
for war goods increased 1891 900 ,0O(
during the first quarter of 1912, ac.
cording to the quarterly survey o1
war lending activity of the Ameri-
can Bankers Association, covering
500 of the country's larger banks
released for publication today.
The survey showed that 406 re-
porting banks in 159 cities had wal
production loans totaling $780,
4a6,260 outstanding on March 81, ar
increase of $89l, ,l96, 300 over the to-
tai on December 81. This compares
with an increase of $3.50 ,000, 900 dur
ing the previous quarter ended De-
cember 81.
The A. B. A. report is based on
high-spotting survey of 500 Of the
country's larger banks, 406 Of which
reported these figures. The 40e
banks reported loans and commit
ments for supplies and equipment
totanng $1,641, 1927 ,768, and for new
plant facilities and construction
1896, ,679,751.
For working capital loans arising
out of operations of customers con-
tributing indirectly to war produc-
ton. the banks reported s562,015, TAI
Miscellaneous loans for war pro-
duction purposes totaled 20,963,
600, the survey said.
British Market Reviewed.
Merrill Lynch, Pierce, Fenner &
Beane are distributing some mos
interesting comments on the fact
that London stock price averages
have been in an upward trend since
the middle of 1910 while the price
trend in American markets has been
almost consistently downward since
of November of that year. While
no complete answer has been
found, the firm reaches three special
conclusions:
First, the upward pressure or
prices of all kinds in England Is
naturally greater than that expert
enced here because we started the
war with large surpluses OF many
commodities, and further because
Englands procurement Of supplies
has been complicated by its much
greater dependence upon ocean
going freight. This has resulted in
a somewhat greater degree Of price
imitation in the English economy
than that experienced here to date
Second, England has been much
longer at war than this country
Perhaps our own economy will show
trends from here forward that will
parallel those in evidence in Eng
land from 1910 to date.
Lastly, there are substantial diff
ferences in corporate taxes. Al
though both countries have an ex-
cess profits tax, there is no normal
tax on corporate earnings in Eng
land. Instead the individual nor
NAL tax on dividends is withheld
by and collected from the corpora
ton, and the stockholder pays only
whatever surtax is involved.
Thus, even while observers are
noting that the English burden is
larger than ours, stock prices may
be rejecting the fact that Ameri-
can stockholders are taxed at least
twice on the same corporate earn
ings, with respect to normal taxes
The English stockholder pays only
one normal tax on dividends"
Bank Deposits Increase.
During the five weeks ending May
20 Federal Reserve Bank holdings
of Government securities increased
by about 5000, O0,G0O, while currency
in circulation rose by $3.50, ,000, 900
Member bank deposits increased
during the period and required
reserves showed corresponding
growth. The net result was a de-
cline of $30O,000,000 in excess re-
serves.
The Washington Office of Smith,
Barney g. Co. today was distributing
a comprehensive review of the rub
ber situation as it relates to both
military and civilian life. The
study was prepared by Charles Ken
nard in the New York Office
Paine, Webber g. Co. and Jack
son & Curtis, widely known New
York Stock Exchange member firms,
plan to merge about July /.