Evening star., 1952-03-13
Higher Loan Rates
Predicted al Forum
Of Capital Bankers.
BY DonoId B. HodIey

SC1uG0l08 IN interest rates o.
bank loans. including real estat
loans, and prospects for q con
tinued downtrend in commercial
lending here. shared attention o
senior officers of Washington
banks at the Mayfiower Hotel las
night.
Washington interest rates ar
based on those at New York an.
leading bankers there have indi
Gated another advance is in tn
making, it was reported. Rate
on wen secured real estate loan
here now range from AZ to
per cent and will tend toward tn
upper limit Of that range, tn
bankers agreed.
Commercial loans viii continu'
to decrease until inventories reacl
more comfortable levels. said on
banker. Another declared: Man.
people ask me whether Washing
ton is overbuilt on housing.
don't think so, except perhaps II
some types Of apartments. Youni
people have been encouraged b!
liberal Government terms to bu.
a~house when they marry rathel
than. live in an apartment ane
save money for a few years. They
are marrying young. too." he said
Four Speak on Panel.
The discussion of interest rate'
and many other matters followed
talks by a panel of four including
Harold Cheedle, Federal Reserve
Board economist: Francis G.. Ad.
Olson, jr., president of the Security
Bank; Warren r. Forster, senior
vice president of the Hamilton
National Bank, and Thomas E
Whinerey. jr.. assistant vice presi-
dent OF the Riggs National Bank
Serving as moderator was RALPH
H. Mittendorff, president Of Wash
ington Chapter, American Insti.
tute Of Banking, which sponsored
the forum meeting on "Banl
Credit Today" Nearly 200 at.
tended.
Fears More Imitation.
Mr.. Cheedle, who has assisted
Oliver s. Powell, Federal Reserve
Board governor. in the Voluntary
Credit Restraint Program, report
ed the program has made q sub
stantial contribution to economic
stability in the last year, but
warned bankers to continue tc
support it by screening loans
carefully.
Opinions differ on prospects fol
more imitation, but Government
financing on a large scale will be
necessary in the last half Of this
year and present relative stability
may be only the lull preceding
more imitation. he warned.
Mr.. Addison reviewed changes
in real estate loans due to the gen.
eral adoption of loans with amor
tized monthly payments. He said
the bankers had work to do in
fitting loan policies into changing
conditions, and advocated a modi-
fication Of Section "a Of the Fed
eral Reserve Act limiting real
estate loans of national banks to
60 per cent of time deposits.
The rule applies to all District
banks. He pointed out that various
banks have a widely different pro-
portion Of time deposits to total
deposits and that as a result the
rule might be too liberal for some
but too restrictive for others.
Four Big Problems Cited.
-Four problems facing bank
credit men here were outlined by
Mr.. Forster as follows:
/. Excess inventories. which he
said should be got rid of, the SOON
er the better. 1T doesn't pay to
be a good fellow when you are
only increasing or prolonging the
trouble" he said.
2. Narrower business profit mar
gins, which force merchants to
seek still larger volumes to sur
vive. A merchant can't keep up
volume without adequate facilities
and large inventories, he declared.
8. A gradual migration of busi-
ness volume to Washington's
suburbs, which affects bankers as
well as merchants. Sooner or later
1t will affect downtown real estate
values" he said, "bdt don't know
the answer"
4. The bite that Federal taxes
takes out Of business cash, which
particularly affects growth busi-
nesseS. "As a business grows, larger
facilities, larger working force,
larger inventories and more work.
ing capital is needed" he declared
But with taxes taking q large
chunk from cash, few businesses
can build reserves to meet growth
and as q result the businessman
comes to the bank for a loan. The
next year he comes for a still
larger loan and the banker will
have to watch out or he will wind
up as a full-dedged partner in
the business" he said
Mr.. Whitney outlined the history
and purposes. of Robert Morris
Associated, a national organization
Of bank credit men.
Banks Declare Dividends.
Directors of National Metro
politan Bank have declared q
regular dividend of 8 per cent OF
go cents share, payable April Is
to holders Of record April 4, Presi-
dent c. F. Jacobsen announced
Books will be closed for transfer
Of stock from April 5 to April a.
inclusive.
Directors Of Security Bank de-
clared q regular semi-annual divi-
dend Of 5 per cent, payable March
81 to holders Of record March "a
President Francis F. Addison. jr.
announced.
Columbia Mortgage Co. direc-
tors declared q quarterly dividend
Of 1K per cent on first preferred
stock. payable March 40 to hold
arg ~ fnnnrfl Ma rrh ~ Uinn proe