Evening star., 1962-03-21
Associations
Join Paradeto
Il Per Cent

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First Federal Savings and
Loan Association, American
Savings and Loan Association
and Capital City Savings and
Loan Association today joined
the growing list of Washington
associations paying Az pei
cent, per annum on invested
savings.
They will raise their annual
rates from 4 per cent, effective
for the period beginning April
l. Interstate Building Associa-
ton and Washington Perma-
nent Savings and Loan Asso-
citation took similar action
yesterday.
Other District associations,
most Of which have been ad-
herring to the 4 per cent rate,
are expected to follow suit in
the next few days. Action is
anticipated at Columbia Fed
eral and National Permanent
Savings and Loan Association.
The Az per cent rate has
been paid for some time by five
area associations, including:
Eastern Building and Loan AS
sociation, Metropolis Building
Association, Home Building
Association, Republic Savings
and Loan and Citizens Build
ing and Loan of Montgomery
County.
Deplored by Morrison
w. Franklin Morrison, ex-
ecutive vice president of First
Federal, Washington's second
largest association, announced
his associations move and de-
lplored the necessity of meeting
the competition.
ut doesn't make sense to
pay "a of / per cent more
for savings at a time when
demand for loans is tagging
and 1t is hard to buy mort
cages at attractive yields" he
declared. 1T means that we
pay more for money that we
will have a hard time putting
to work profitably."
Joseph P. McMurray, chair
man Of the Federal Home Loan
Bank Board, has been urging
savings and loan associations to
hold the line on dividends VOL
unfairly to prevent develop
ment of unsound loan practices,
inadequate reserves and other
by-products Of excessive COM
petition for savings.
Recently he expressed deep
disappointment in results of
the boards efforts to win VOL
untary cooperation of the
associations in restraining di-
vidend increases and said he
planned to ask Congress to
authorize the FHLBB to fix
maximum rates as the Federal
Reserve Board does for COM
mercial banks.
He pointed to dividend in
creases to as high as 434 per
cent among West Coast asso-
Citations and said he could see
no justification for them. The
high West Coast rates tend to
draw savings from all sections
Of the Nation and prevent their
use in the communities in which
they originate.
Wants Adequate Rates
However, Mr.. McMurray has
acknowledged the need for divi-
dendS adequate to compete for
savings along with higher saw
ings interest rates of CONNER
cial banks.
The higher savings rates of
commercial banks, which be-
came effective January /, have
had a notable impact on the
inflow of savings into savings
and loan associations, includ-
ing those in Washington.
Most area banks have ad-
vanced savings interest rates to
the full limit allowed by the
Federal Reserve Board, 4 per
cent for accounts held for a
year or longer and 31a per cent
for accounts held six months to
a year.
The District associations in
vested capital has moved on to
new high marks in each month
of this year, but the net inflow
is running substantially below
a year ago. Time deposits of
area commercial banks have
jumped from 10 to 80 per cent
since the first of the year.