Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-06-13
H
Bankers Seek
Broader Power
In RedItyLoan
Federal Reserve Act
Amendment Fuvored
At White Sulphur
A-16 THE SUNDAY STAR
80 Washington, d. G.
SUNDAY. JUNE 10, 1854
BY Donald B. HodIey
Financial Editor Of The Stor


w. Va, June IAN amend
ment to the Federal Reserve
Act that would double the ca
pacity of Washington banks to
make construction loans and
open a much broader field in
real estate loans, was Endorsed
by the District Bankers Asso-
citation here today.
In resolutions adopted at the
close of the associations seth
annual convention at the Green
brier, the bankers went on rec
ord in favor of a bill now be-
fore the Bureau of the Budget.
The bill would amend Section
"a of the Act to authorize ma
tional banks to make highly
profitable construction loans up
to so per cent of capital and
surplus instead of the present
limit Of so per cent of capital
only. In most cases. surplus
equals capital or even exceeds
it. Construction loans could be
made for as long as nine months
instead of just six months as at
present.
Greater Flexibility Cited.
The amendment also would
limit real estate loans to so per
cent Of time deposits or 20 per
cent of total deposits, whichever
is greater. This choice would
permit greater flexibility than
the present limit of 60 per cent
of time deposits, especially for
some Of the savings banks. Be-
cause the Controller of the Cur
rency regulates Washington
banks. all of them comply with
national bank requirements.
The bill would permit the
banks to make real estate loans
for maturities up to 20 years,
providing they were completely
amortized by monthly payments
Bankers have chafed under the
present limitation of 10 years
and 40 per cent amortization in
the period. Because of this un-
realistic limit. building and loan
associations and other lenders
have enjoyed a big advantage
over the banks.
The resolutions presented by
Bruce Baird, president of the
National Savings and Trust Co.,
and chairman of the resolutions
committee, emphasized the asso-
cations opposition, however, to
"the extension of mortgage
credit beyond norma! prudent
limits or the subSidization Of
home ownership and occupancy"
Degrees For Career Bankers.
Another section urged the
American Bankers Association to
seek longer training opportuni-
ties and more advanced studies
to enable a career banker to at
tain a nationally de-
gree, comparable to the medical
doctor or lawyer.
Washington reserve member
banks attending the session ap-
proved proposed modernization
of rules governing the election
of Glass A and B directors of the
Federal Reserve Bank of Rich
mond. They designated Daniel
w. Bell as their nominee for
Washington's first Glass A di-
rector if the proposal is finally
adopted.
Mr.. Bell, president of the
American Security & Trust Co.,
will be nominated by John A.
Reilly, president of the Second
National Bank, who was named
to the nominating committee of
the Richmond bank for that
purpose.
The proposal was presented by
Francis G. Addison, jr., presi-
dent of the Security Bank and
chairman of a committee which
included Robert C. Baker, H. T.
Bisselle and A. Scott Offutt.
Would Sponsor Institute.
Mr.. Baker, the outgoing As
ISOLATION president, appointed a
committee of five to study a
proposal from M. S. Szymczak,
member Of the Federal Reserve
Board, that the association spon-
sor an annual institute Of top
bank officers and the heads of
Government agencies to promote
a better understanding of basic
principles of supervision and
regulation.
The committee incluedS: Mr..
Addison. who will serve as chair
man; Mr.. Reilly, Mr.. Bell. War
rem r. Forster. senior vice preSi-
dent of the Hamilton National
Bank, and Robert v. Fleming.
president of the Riggs National
Bank. Mr.. Fleming presented
the proposal.
New officers headed by Fran
els E. Robey. vice president of
the Bank Of Commerce and Saw
ings, were presented at the final
session.
w. Hiles Pardoe, vice president
of the National Savings and
Trust Co., who was promoted
from second to first vice presi-
dent. presided at the final ses-
sion.
Sees Possibility Of Imitation.
Eliot Janeway, economist. de-
clared there is a real possibility
of an imitation that could make
the Korean imitation look like
stability. He pointed to pros
poets for vast non-Federal de-
tense projects and the danger
that resulting demand will be
at high tide at the time Of a
crisis when material shortages
pile up quickly. Members of
ABA, including all District
banks, elected Richard A. Norris.
president of the Lincoln Ma
tional Bank, to the ABA NOM
mating committee that will serve
at the Atlantic City convention.
George Fisher, senior vice preSi-
~Sa,,t - tho WoShinut0n Inan