Evening Star Newspaper, January 3, 1926, Page 35

26 RAIL BUDGETS ARE VERY HEAVY Roads to Expend Immense Sums on New Equipment and Improvements. \ to The Star 1., January The consensus of opinion of the presidents of most of the important raflway sys- { tems of the cou thom ‘n Jusines crease * througho South, wh very 1 as indicated by . is that freight show an In- If of 1928, and, will be heavy . especially in the was the first one-h crops Big Year for Improvements. infor urnished by the ‘rail- way executives shows that in order to keep railway facilities abreast with the demands of business the manage- ments planning to continue to make large expenditures for improve- ments and equipment this year. The capital expenditures made by the class I raflways in 1923 were ahout $1. 1,000,000, in 1924 about $875,000,000 about $775,000,0 expenditures mad; says Rallway Age, “depend the truffic moving in This is especially true orders, which usually 1 than the espondingly nes.’ in any of eq inere ipment 158 Mo in tr when t Likely. eds informa ve roads, with approxi ding their tures in 1926 ds. with ap- 52 per country, $3580,000,- rovenments ddition to une tion from 39 repi ate ge of the y have appropriated W of new capital d_equipment ir g pended appropriations carrfed over raking into consideration work carrfed over, it it the amount spent and equipment by in 1926 will be at has averaged or around unt of is estimated rs $800,000,000. Larger Budgets for 1926, Somgslort budgets 1926 follows: Atchis 2 r railwa Central, $41 $36,100,000 : Tllino! Pacifie, sco, $21.000,000; Island and_Pacific ! Loufsville and N 000,000; Norfolk and W 000; Reading, $16 ern, $13500,000: Central of > $13,900,000; Denver ande Western, $11.000,000 TRADING IS BRISK IN BOND MARKET| C. and 0. Fives and Southern FourseActive Among Rails. ! Averages Higher. e ind Rio Byt ated Press NEW YORK, January 2.—The new vear ed ‘off nuspiciously in the bond market, With prices moving for ward in response to a sustained de- mand for standard raiiroad and indus- trial jssues. The combined average o 40 representative bonds, as calculated | by Assoc Press tabulators stood | today . approximately 3 points | above the starting point of 1 Most of today's trading activity cen. tered in high-grade rallroad liens. C incident with ware and Hudson th s ertible 3 nds mounted new o g segregation of the compan operties will take this by giving valug tockholders, contributed 1and for the road's securities peake and e < tive and hij semi-speculati 13" adjustmen a new pesk at 937, Ofl and sugar company bonds were the chief points of strength in the in- dustrial division. Both Skelly and oil convertibies moved up u £0, and u good demand was 1 Sugar %s, evoid of trad Liberty honds ¢ et trading. | CHICAGO DAILY NEWS WILL ISSUE BONDS Offering of $8,000,000 Coming To- morrow—Priced at 88 to Yield 6.25 Per cent. Chesa- 35 and 45 also An advance s led by attained or Tlas CHICAGO. a issue of | Dally News, Inc., cent sinking fund de. be offercd Monday investors have had an t 1equire secifrities of wspaper 15 made known king hot hich will handle es that the newspaper, in rs it was owned and man- the late Victor ¥F. Lawson, unprofitable year. before Federnl taxes, 4 $1,497,625 annually for and nine months September 30, 1925, while the maximum interest requirements on he debentures will be $480,000. The lalance sheet as of the above date, as djusted to glve effect to this financ- shows total assets, after deduct- ing all liabilities except these de- benture $15,000,000 The debentu: will be offered oup of ban! headed by Halsey, t & Co. and Kissel, Kinnicutt & at Y8 to vield over 6.25 per cent. debentures mature January 1, and carry with them the right to purchase preferred stock at $100 par 6 per will i ed by by who, with as hased the Daily News on December 24, has pledged himself 1o maintain the tradition and ideals of r. Lawson. He has been with the News 20 years. TEDZRAL LAND BANK BONDS. NEW YORK, January 2 (Special). i, A sked. Notemher. 19410p31 rozs b S fates, pur Jefferson was presented 160-pound cheese on his first New Year day in the White House. | bank McFADDEN FEELS BANKING BILL BY CHAS. P. SHAEFFER. The national bank bill, which failed to become a law at the last session ot Congress, will shortly be introduced again, with passage virtually assured in the bellef of its author, Louls T. McFadden, chalrman of the Hou committee on banking and currency. The measure, commonly known as Mr. McFadden's “foster-child,” will shortly be reintroduced in the House In substantially the same form it pass- ed that body last vear. The only ma: terial difference in the House bill and the bill as reported to the Senate, is in the disagreement over the prohi- bition upon State-wide branch banking in the Federal Reserve system, made by section 9 of the House bill. This sction was struck out by the Senate committee, but the other 16 sections are the same in substance in both bills, with one or two unfmportant ex- ceptions. Mr. McFadden’s proposed measure can be fairly said to meet almost uni- versal approval in banking circles. No tmportant organization or influential financial body has as yet been able to detect a flaw in the prepared bill, which is recognized as one of the most important set of amendments ever conceived to the banking structure of the country. This belng the case, the following summary prepared by Mr. McFadden and printed in the current | tssue of the Bankers Magazine, u well known financial publicasion, will fa wiifarize every one interested with the salient points of the proposed meas. ure. 1 House Passed Measure. No financial measure within recent vears hus been given closer study by the writer and members of the com- mittee on banking and currency. For several years past the +eed for cer- tain amendments to the sanking laws has become increasifyly apparent, and last year Congrées became ini pressed with the nece®ity for imme- dite action. After many conferences with the controller of the currency, and after a very exhaustive investign- tion by that offictal into the technical aspects of the need for new legisla- tion. u bill was finally drafted, intro- duced in the House and referred to the committee on banking and cur- *. This committee not only held hearings on the bill but gave every section the most careful study In executive session. Thix measure was favorably reported to the House and after debate of several days was passed on January 14, 1925. It is not necessary for me to enumerate the va- rious provisions of the bill, since it has been before the public for more than a vear and has been extensively discussed by the banking fraternity. I may say, however, that the main purpose of the bill is to remove cer- tain outstanding handicaps from the national banks, which now stand in the way of urrying on a full-fledged and efficient modern banking busi- ness, Amenditents’ Declared Needed. | “The national bank act has been or | the statute books for more than half a century and has not been sufficiently amended within recent times to ac- cord with some of the more modern demands for banking services. This is not true of many of the State banking codes. Since the frust companies are now | engaged in carrying on a commercial banking business and are in fmme- diate competition with the mflh-uhll s in this fleld, in addition to th other banking services which their State charter, powers permit them to render, the national banks find them selves at a serfous disadvantage. Mor: favorable S bLanking laws have enabled t! State banks and trust companies to develop forms of bank ng service which the public has come to recognize and expect from a bank. and which, in fact, from an economic and governmental standpoint, have been demonstrated to be sound. “‘Congress has already recognized this situation in part by permitting national banks to exercise trust pow- ers and thus have an opportuunity to get their share of the very profit able trust business which {s being buflt up by the banks as a regular banking service. This bill simply goes a little further in the same direction, but proceeds with the same con servatism and caution in expanding the powers of the national banks After this bill becomes a law, and I} have no doubt that it will be enacted | into law at the coming session, the national banks will not be permitted to exercise a charter powers of which a conservative banker can rea sonably disapprove. The Charter Question. “or example, the national banks are at a disadvantage by having their charter powers restricted to a term of Y€'ks time pusses the period of the life of the charter grows less and less until a time is reached when the char ter expires by operation of law. No charter limitation affects the State banks und trust companies in practically all of the metropolitan financlal centers. This has a direct hearing on the trust business of a bank. How can a national bank with o limited charter accept the adminis tration of a trust which is perpetual In its nature or extends over a longer term of years than the charter term of the bank? This question is of con- siderable embarrassmen to the na- tional hanks and has been the cause of several national banks giving up thelir ational charters in favor of State charters. ‘These perpetual trusts in he nature of educational and scientific and charitable foundations are becom ing of increasing importance, and the national banks should not be deprived of the opportunity to administer them. Consequently, the bill gives to na tional banks the right to hold their charter powers for an indefinite length of time subject at all times to the will of Congress and to the operation of the laws relating to liquidation and in- solvency. When this provision be- comes a law the national banks will be upon the same plane, as to the con tinuance of their corporate existence, as are the State banks in Arkansas, Connecticut, Florida, Tllinols, Ken tucky, Maine, Massachusetts, Minne- sota, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Rhode Island, South Carolina, Tennessee, Vermont, Vir- such THE SUNDAY STAR, WASHINGTON, D. €, JANUARY VERY CONFIDENT WILL BE PASSED Measure Soon to Be Reintroduced in Congress—Sa- lient Points Elucidated by Author—Only Slight i Changes Made—Wide Support Claimed. operation. This applies both to na- tional and State commercial banks, even in those few States in which there are organized separate savings banks. There are on deposit today in the national banks a total of sav- ings deposits to an amount of about $5,000,000,#00, which is about one- fourth of the entire savings deposits in all banks In the United States. There are about 11,000,000 individual savings depositors in national banks, constituting about one-third of all of the persons carrying money in sav- ings deposits in all banks. These figures do not include commercial time deposits, “Although the State banks and trust companies are permitted to make loans upon the security of reat estate for considerable periods of time, the national banks may not make such a lean upon the security of m first mortgage upon city real estate for a longer period than one year, and they cannot lend in this manner a total sum in excess of one-third of their time or savings deposits, al- though they may make loans upon {fmproved farm proper'ty for a period of five years. This restrictfon to one year {s a serious handicap to the na- tional banks, especlally to those lo- cated in the smaller citles. A first mortgage upon properly appraised city real estate makes s safe a loan as can be made, and where the funds 0 loaned limited to savings de- posits there is every reason to en- courage the development of this char acter of business by the national banks. In fact. it the national banks are not permitted to compete in this fleld with the trust companes it will prove disastrous to the national bank ing svsteni. The present policy of the law is not only to disqualify national banks from engaging in this construc- tive economlic activity, but also to compel many small banks to seek outside investment, about which they know very little, for their savings de- posits. It penalizes the national banks by preventing them from taking ad- vantage of the best security that many of thelr customers have to offer, thereby causing them to lose such customers. ‘The bill, therefore, extends the time which a national bank may make loans upon the security of first mort- guges upon city property from one year to five years and permits a total sum to be thus invested equal to one- half of the savings deposits. Each such loan is limited to 50 per cent of the appraised value of the property. This, 1 think, i one of the most com. mendable amendments in the bill. “Other sections of the bill deal with technical questions of banking. Some of them remove archaic restric tions and repeal obsolete provisions of law. Others are designed to clarify the law as it exists at the present time. Among these is the provision for the regulation of the investment security business of national banks, This is & recognized modern banking service concerning which the national bank act needs adjustment. Since the bill was originally ntr {duced ther has appeared from t to time some objector to certain visions, but invarably upon close analysis and explanation of the pur- pose of the bill the objection disap- peared. Branch Banking Problem. 'S0 far as the terms of the bill are concerned the opposition has dwindied down to one section—section —which undertakes to express a natlonal policy on tha subject of branch banking 1 prohibiting the further extension of State-wide branch banking in the Fed- eral Reserve system. This opposition comes from a small group of State branch banking systems and their sym- pathizers. They believe that branch banking is destined to become the banking system of the United States, similar to the European system. This is the system in vogue in Canada, and we are more famfliar with branch banking as carried on there than on the other side. In Canada there are only 11 banks, and these are located in the two citles of Montreal and To- ronto. They operate about 5,000 hranches over the vast territory of the Dominion, extending from coast to coast. __“I shall not attempt to become here involved in a discussion of the pros and cons of branch banking, but deem it sufficlent to say that Congress is not ready to glve its sanction to a policy which will lead directly to the | extermination of our system of unit banks, large and small, through the services of which there has been erected a system of finance without equal in the world for strength, vitality and adaptabllity to local needs. In this section of the bill, therefors, the House took the position that the time had come for Congress to ex press jts disapproval of State-wide branch banking by enacting appro priate legislation with reference to the two financial under {ts direct control; namely, the natfonal banking system and the Fed. eral Reserve system. In section § of the bill, national banks are pro- hibited from engaging in State.wide branch banking and in section 9 the same restriction is put upon the State bank members of the Federal Reserve system. An Emergency Measure. “There is another group which has opposed the bill as a whole, upon the ground that it has been formulated without a previous exhaustive scien- tfic study by a commission of econ- omists and bankers. They apparently wish to see a bill Introduced which would have for its purpose the solu- tion of all of the banking problems, Federal Reserve. National and State which are before the country today. In this connection, I desire to take this oportunity to say that the pres- ent national bank bill is not an at- tempt at a scientific codification of all of the banking laws over which the Federal Government might have jurisdiction. There may be a need for some such codification and there are, no doubt, many unanswered ques- tions of banking of which the Federal Government could take cognizance but which are not covered in this bill. This bill s an emergency measure. “It takes no great amount of de- liberation by & scientific body to com- prehend what it proposes to do. “Each section of it is an amendment < nd West Virginia. It will be f\:le fhat these States include the fm. portant cities of New York, Buffalo} Boston, Chicago, St. Paul, Minneapo- lis, Cleveland, Cincinnati, Louisville, Omaha, Providence, Nashville, Rich- mond and & number of other lesser financial centers. First Mortgage Loans. “Let me give another example of how the bill amends the national banking laws. It is In connection with first mortgage loans. For a long time there has been a worthy tradi- tion against tylng up the commercial deposits of a bank in long time loans upon the security of real estate. The Federal Government has, with great strictness, enforced this principle upon the natlenal banks. The demand de posits in a commerclal bank should not be invested in such slow assets even thoygh the security is recognized as ample and safe. But alongside of the commercial business of banks in general there has grown up another line of banking business, that of re- ceiving savings deposits. In any well rounded banking service today vou wiil find a savings department in to some particular section of the na- tional banking laws. After a most exhaustive study by the office of the controller of the currency and by the House committee on banking and cur- rency it was decided to center upon these particular amendments at this time in order to give to the national banks immediate relief from certain archaic restrictions imposed upon them by the national bank act. The controller of the currency is in direct contact with all of the national banks. He has in the field experienced na- tional bank examiners who keep him in touch with banking conditions in every part of the United States. His office has a body of experience and ay fund of information which cannot be found elsewhere, and no commission, however constituted, could lay before Congress an intelligible national bank- ing measure without having the ene- fit of the controller’s experience. This is the reason why Congress has im- posed upon the controller of the cur- rency the duty each year of making recommendations as to changes in the banking laws. “This bill s not open to criticism for any lack of competent consideration of its subject matter. Tt is based upon instrumentalities | récommendations from the controller and s put in the legislative form de- sired by the House committee to carry out the policies intended. Sitaation Faced Today. “The emergency which the national banks us a system face today is due to the lack of the charter powers to meet the requirements of modern economic conditfons in industry and commerce. Changes in the banking laws have not kept pace with the revolutionary changes which bhave taken place within recent years in production, transportation and communication. Many of the State legislatures have recently enacted new banking codes in order that the State commercial banks and trust companies may be equipped to meet these new demands. It cannot be expected that the na- tional banks will sit idly by and walt indefinitely for Congress also to take action. Many of them have already taken out State charters and many more will doubtless follow in the near future if enabling legislation is not #peedily enacted. This bill is an an- swer to this need. It simply touches upon the most sallent defects of the national banking laws as they relate to the operating conditions of the na- tional banks. It is necessary now to put the national banks on their feet. When this is done there will be time enough for a commission to deliberate and report with reference to the many ofther problems of banking which must be ultimately solved.” GROSS GRAIN VALUES LESS THAN IN 1924 Larger Yields Bring Lower Finan- cial Returns—Texas Leads in Production. Dy the Associated Press. The gross value of grain crops in the United States last year was placed by the Department of Agriculture at $3.810,718,000, or $705,000,000 less than in 1924, Despite larger yields, the money val- ue descended because of lower prices. The largest deficit was in corn, the gross value of which was estimated at $1,933,326,000, as compared with $2,. 270,564,000 in 1924. Texas led all the States in the gross value of agricultural production in 1925, all crops in that State based on December 1 prices being worth $799 - 330,000, lowa was next with a gross value of $477.004,000, while Callfornia was third with a production of $469.- 359,000, In a bird sanctuary within eight miles of the Marhle Arch, London, nearly 50 varieties of birds have nest- ed, while 40 other species have been recorded as passing throus CURB STOCKS START NEW YEAR WITH RISE Oils and Utilities Leaders in Good Sized Gains in Saturday Trading. By the Associated Press. NEW YORK. January 2.—Trading conditions in today's short session on the curb exchange displayed the same strong characteristics that prevailed in the closing period of last year.| Decided strength appeared in the gen- | eral list, with the olls and public utility shares claiming prominence in price fluctuations. Electric Bond and Bhare opened up with a gain of five and three-fourths points at 81%, and after suffering a sharp reaction of about three points rallied to 843. Electric Investors sold from 72% to T415. American Power rose to a new high figure at 72, while an easler| trend was noted in United Light and | Power. Moderate gains were made in the ofls on increased activity. New high records were attained in several mis- cellaneous issues, which included Creole, Carib Syndicate and Lago issues. There were persistent and broad- ening tendencies in the later trading, which developed into one of the larg est trading half sessions for many months. Prices {n numerous issues ex- ceeded the high record reached last year. Glen Alden Coal moved con- trary to the general trend, declining seven points to 160. LOWEfi CiAiLLiliAONEY FORECAST THIS WEEK NEW YORK, January 2 (P).—Call| money held firm at § i | per cent this | week, but an easler tendency 18 ex-| pected next week, when the large di.| vidend and interest payments find| their way back to the banks. Foreign exchange rates held steady. with trading unusually light in vol ume, | MANY NEW ISSUES ARE | EXPECTED AT ONCE? NEW YORK, January 2 OP)— financing is expectad to be unusuall heavy in the first quarter of the ne year. Several large railroad and in-| Qustrial stock offerings are in pros-| pect, one of the biggest belng t the National Cash Register Co.. which | 18 expected early next weel. Some of | the large railroads also are reported t be contemplating new financing § stock instead of in bonds or notes in previous years. Complete Transactions for 1925 On Washington Stock Exchange Following are the complete transactions for 19 Stock Exchange, the quotations being on the Washington furnished by W. B. Hibbs & and showing the opening, high, low and close, as well as the total number of sales | in each issue: Sales. BONDS 7.000—Ana. & Pot. River R. 6,000—C. & P. Telephone 1st Is. 28,800—C. & P. Tel. of V. GA. 303,000—Capital Traction 1st G 66.000—City & Suburban Ry 49,000—Georgetown Gas Lt. 1st 5s. 00-—Pot. Flec. Power 1st ,000—Pot. 500—Pot. Elec. Power Gen 78.100—Pot. Llec. Power Ref. 2,000—Wash., Alex, & Mt 7 5 . Alex. & Mt. Ver. ctfs. Balto. & Anna. 1st ie 00—Wash. Gas. Light Gen'l 3 00—Wash, Gas Light Gs. 5 . Ry. & Elec. Cons. 4s.. 333.100—Wash. Ry. & Elec. Gen. & R 10.000—Pot. Joint 18.600—Riggs Realty (Long) &s 0—Southern BIdg. Co. 64s.... 300—Wash. Market Cold Stge. Us. 13,700—Wardman Park Hotel €s. STOCKS. 12,585—Capital Traction 10,980—Washington Gas 7.8231,—Wash. Ry. & Elec. com 9,374—Wash. Ry. & Elec, pfd 2 c. Power pfd, c. Power. Int. Recpts. National Bank 720—Commercial Natlonal Banl 45—District National Bank. 10—Farmers & Mechanics Nationa 3 136—Liberty National Bank.. 96—Metropolitan National Bank.. 2,289—Riggs National Bank 116—Second National Bank —Washington National Bank G46—American Security & Trust. 252—Continental Trust erchants Bank & Trust. ational Savings & Trust. 630—Union Trust 165—Washington Loan & Trust 17—Commerce & Savings 4—East Washington 10—Washington Mechanics 438—Firemen’s Tnsurance 132—National Union Insurance 1—Columbia Title Insurance 109—Real Estate Title Insurance 8—D. C. Paper Mfg. pfd —Lanston Monotype erchants Tfr. & § ergenthaler Linotype ational Mtg. & Inv. pfd. & W. Steamboat....... 400—01a Dutch Mkt. of Va. pfd 30—Security Storage ... 100—Washington Market 20—Tellow Cab Co.. 404—Chapin-Sacks 8% preferred 4—Chapin-Sacks 7% preferred 5—Chapin-Sacks common .... 0—Washington Base Ball Club. —Banking Trust & Mortgage 1,210—Citizens Saving Bank.. 48—Departmental Bank ... unsey Trust shington Title Insurance. BON. $100—Army and Navy Club 3s. $5,000—\etropolitan Club 41s. Financial Highlights of Past Week Brought Out in Nutshell by Statistics Special Dispatch to The Star. NEW YORK, Jgnuary 2.— Stocks (average of 50 issues)......... Bonds (average of 40 issues).. Foreign bonds (average of 10 issues). Federal reserve ratio ... Money rates in New Yor! Call . Time . Nov., 1925. 4,581,780 Unfilled steel orders Pig iron production Building permits: Number of cities Amount Commercial failure: Number ....... Liabilities Revenue car loadings: All commodities . e Grain and grajn products . Coal and coke . Forest products Miscellaneous products . Ore Live stock $34 Week (3 3 f. 15,000—Dist. of Col. Paper Mfg. 1st 6s.. stock Land Bank —JFederal-American Natlonal Bank. UNLISTED DEPARTM] eseseseess 673 $35,922,421 Open. 913, 1001 High. 18t Sa.. , fiat s.. i Bank. D This week. Last week. High. ... 138,01 Low. High. Low. 13641 13546 13449 This week. Last week, . 85.25 85, oee. 103.26 103.32 This week. Last week. Year ago. 66.1 3 This week. Last week. .8 . 4% to5 Month of Oct., 1925. 4,109,183 144,186 395 $411,145,164 1,681 1,653 $29,543,870 $31,123,910 of Dec. 19, '25. Previous week. Year ago. 967,886 1,008,824 899,776 64,169 58,652 47,183 203,901 208,275 202,719 69,467 72,211 67,414 6 4% tos Month of Nov., 1924, 4,031,969 100,616 1907 402 402 0,652,424 $269,605,041 1,672 341,678 360,442 207,348 11.625 12.540 34,396 15 3, 1926—PART 1. STOCK VALUES HIGHER. Baltimore Also Reports Good Year Special Dispateh tq BALTIMOR just ¢ perou busin The ber of Stock point of 19 in Other Lines. The Janus rlosed will be re | s one in many lines o u.m..u.u.I ess and finance 925 found w I numn ecurities on the Baltimore Bxchange well ihend the at which they were at the close | Y 4. Investment bhank ANUARY wonder for all folks who p high standards of this complete home outfit to 1 broker: out the 1 shg the KT6.86 rk in Hom n to newly furnish ge firms, generally have had an unusually nks. & headquarters in better position than | a8 are also many of the industrie . ngs for the we country, compile Commercial he hronicle, nt under Outfits will make th refury sure « u save u're ivel d this month an extra roc ! pos i ene $10 CASH 3-Piece Living Room Suite 1 . e luxu $ CASH | their hor qualities in kecping with t} LONDON BANK CLEARINGS* SET NEW MARK IN 1925 LONDON, January 2 UP).—The an- cl g house state- issued shows that the bills, checks and the like paid at b bankers' clearinz h usl’! during 1925 amounted 1u' [U_\ 30, or approximately $201,185,, nual bankers ar ent just grand total of ec a record, 14,000,000 constitute of £ 19; figures inerez 0,000,000) over ng heade Ju gh on the purc 3-Burner Gas Stove as wh fine cos 51575 Only $1 Cash 8-Piece Suites in Walnut Finish and Gum Are Exceptional e result of Beautiful 4-Piece Walnut- Finished and Gum Bedroom Suite ts of ¢ 111 dressing table and chiffonier derful suite is one of the most nary bedroom val Simmons Day Bed alf-cotton strong Uscful and to operate. Complete with pad, cretonne co sanitary spring. attractive; easy Special at— $14.75 Only $1 Cash bow This extr we have ever end bed, Woi ord Values at Only This beautiful Bed cotton 1 wire spring. $2.50 Cash—$1 Weekly ith all- ttress woven Special Davenport-Bed Suite Extremely Low Priced One easy motion iul davenport into mattress and bedding use. An attractive sofa b; fortable bed by night upholstered in a rich brown or struction. convert day, this a full size bed, with n place, ready to beauti- a com- 129 Full spring con- il three picces blue velour. Only $10 Cash