Evening Star Newspaper, April 26, 1931, Page 61

News of Markets Pages 1 to S FINANCIAL AND CLASSIFIED he Sunday Star ‘-Classifi.ed Ads Pages' 5 to 12 Part 6—12 Pages WASHINGTON, D C SUNDAY MORNING, APRIL 26, 1931. SAVINGS CAMPAIGN SPEEDING RAPIDLY, BANKERS ARE T0LD Financiers Would Prepare Depositors to Meet Eco- nomic Slumps. N4EED FOR FINANCIAL EDUCATION IS STRESSED @hiwsing Moonbeams for Three | CRASH OF ALFONSO LEAVES EUROPEAN BUSINESS NERVOUS Most Commodity Markets, However, Improve Dur- ing Past Week. ENGLAND’S NEW BUDGET DISTURBING TO LONDON | Paris Continues Inactive, but Un- dertone in Berlin Is More Lauds Unit Banks STOCK PRICES DROP INWEEK'S TRADING Heavy Liquidations Send Some Down to 1927 or 1924 Averages. SHAREHOLDERS’ INCOMES ARE MENACED BY TREND Unpleasant Financial Reports of Industrial and Rail Companies T0TWOYER LOWS |[TWO FARM LOAN BANKING SYSTEMS Local Banker Sheds Light on Financiering Methods in Rural Sections. Land and Joint Stock Con-! cerns Handle Huge Sums Every Year. BY I. A. FLEMING. 7 there is any subject concerningi which there is general ignorance among nation from those who should be in a position to disseminate accurate facts, it s the mystery of Federal Farm Loan ks and Joint Stock Land Banks. have been in operation since 1916. At a rule any one called upon for in- 1 laymen and anything but clcar expla- ARE EXPLAINED T | \SPRECKELS FAVORS | U3, TAKING LARGER PART I BUSINESS Sugar Manufacturer Says Wellbeing of People Now in Jeopardy. !SAYS PRESENT POLICY SOCIALISTIC IN TREND Wants Gouernment to Put End to Present “Destructive Tactics” formation on either of these systems, | OSCAR WELLS, 1cfers the questioner to a banker or | Former president of the American | . Years Costly—Other Echoes Confident. Accesserate Movement. of Indwustry. | HOWARD MORAN, ! Local banker, who recalls highlights at | sessiops of savings bank secticn of American Bankers’ Association at_Au- | i gusta, Ga. This division of the A. B. A. | 115 engaged in a national savings cam- | | paign. | From A. B. A. Meeting. { BY EDWARD C. STONE. rogress in the nationwide [ "l‘!;r::?nppllzs to increase savinge de- sits in the banks was reported at 3 Spring meeting of the executive ccl ncil of the American Bankers' As- soq iation at Augusta, Ga.. according to 1 ward Moran, vice president.of the ‘A‘$serioan Security & Trust Co, mem- e} ofrthe savings bank division of the ! “ A, and chairman of the sav- tir | ss foank section of the District Bank- ' # Association. i ankers everywhere, Mr. Moran re- OUTLO0K BRIGHTER By ] | I | | Special Dispatch to The Star. NEW YORK, April 25—Cable dis- patches to the Business Week give the following survey of business abroad for the week ending April 25 Europe—The current feeling of busi- ness nervousness was precipitated b the unexpected overthrow of the Span- ish government. During the week com- modity markets—with the exception of wool and jute, which showed signs of improvement — appreciably weaks:med. Wheat was firm on increasing evidence | that European wheat reserves are ap- proaching exhaustion, notably in Ger: | ing at the business conference just held | * NEED IS STRESSED Bankers' Association, who urged the | advantages of unit over multiple bank- | BY CHARLES F. SPEARE. at Lexington, Va. e makes an €X-|gpecial Disatch to The Star. ception of municipal branches in cit large enough to support suburban di NEW YORK, April 25.—It is neces- sions and prefers branch to group sary to record the fact this week tha banking. | common stocks have broken through fpshancandid: (both the 1929 and 1930 low averages: have been’ selling within the price areas of the years 1927 and 1928; that rail- road stocks have declined 'to a level I notreached since 1924; that numerous |railroad and industrial bonds, to say nothing of South Americans, have had that many prominent industrial issues | . lawyer for an answer, with the chances favoring a not very lucid reply. E. J. McQuade, president of the Lib- erty National Bank, has made a close «iudy of both kinds of banks, using his own methods of research as a banker and a lawyer, also with the aid of the | recommendatsa n by the association and | Treasury Department. How Two Systems Operate. This study by Mr., McQuade might vell be filed away for reference for pos- sibl2 need in the future: The Federal farm loan act, which was | approved July 17, 1916, provided for the establishment of two systems of farm morigage banks, the Federal Land Eanks and the Joint Stock Land Banks. ___PDWLIRD J. McQUADE. | the appraiser, jthe bank, if it also ap: | proves, may prA ceed to close the loan. BY JOHN F. SINCLAIR. NEW YORK, April 25 (N.AN.A).— Rudolph Spreckels, sugar manufacturer and banker, thinks the well-being of the people of the United States—rich Each borrower, through an association jand poor—is in danger “if the Gove | cent of his loan. | with the associatio1 as collateral secu- | rity, and when ti\a loan is paid in full the stock is retirel.. These stockholders | are subject to dc is required to sul scribe to shares of its capital stock in \the amount of 5 per 4 This stock is pledged ble lability to the jernment continues a drifting policy. Mr. Spreckles believes in the prin- |ciple of fighting fire with fire. He says {he would like to have the American | Government ascume fuller control and regulation of fndustry, and thus give | many RS O iag & special effort to get | many and France. The scarcity of su |a serious reaction, and that an in-irpe mct was designed, according v the | €Xient of the par v A toad ot ab - INRESERVE AREAS iImprovement in Sentiment and Fact Reported at 1D om0t moderate means to set aside % m vings for a time of need. in gl’ 3 l:e.fletnm ‘meet such conditions 4 evailed during the present ‘m iing, bankers from all parts of the TUni] ed States reported great interest in_4ais move. k division, Mr. Moran added, uedb-nlnm.her point, that of interest & in his report. This is one of the ‘est_issues now before the bankers he United States and of special im- ] carice to the savings departments in ‘banks. How to keep up interest on ‘ngs in the face of low money rates the consequent reduction in earn- 3 drawing the attention of the geol'(e;nl:dl in thg banking field. { ‘Would Enlighten Depositors. erican Bankers' Association i bfl:: it a proposal to work out som1e method by which depositors, as well as bankers, may have definite knt the necessity of adjust- ing , elther up ot down, as’ the current money market warrants, toi obviate the disposition for suspicion fl;n:! banks in lowering interest rates o1y, savings and time deposits. This. of cchirse, is a matter of education. Fre- 1 jgntly, Chairman Robinson told the 2’ tes, outside agenciés utilize this n lon -mn of bank deposi- to n& own designs at the e of the banks. "Another matter of general public in- te yest gelated to the combining of sav- ir gs accounts and time deposits in re- 3D irts and statements. This was held fm jsleading and confusing. The bankers at | Augusta sald these deposits should bey separated, both in accounting and st ptements. The banks cannot afford | pay as high interest on short-time Em.l as on true uvl:npbed;%osm. its cannof e e Pmement. which render & ieht a0 the banks are being flooded awaiting 1 he 4 w5dAg m | s division, was made by the chairman the - Foundation for -Education in Eq >nomics, John H. Puelicher. —He quf rted one committee in the South as saj ing that if the school talks had been #i{ en earlier, many of the banks now felq sed would still be open. ! Chasing Moonbeams Costly. don't believe,” Mr. Puelicher told 1thls delegates, “that there has been a tidie, at least during the life of any prisent here, when a general knowledge of ! distributed to all the ?pesople ‘would be of such great assistance ol %ihs country. People are realizing itk folly of having chased moonbeams {1ck ‘some three years. ith that realization comes much he ip and sowow. I feel that had th H?m a better knowledge of ele- m pntary economics much of the moon- chasing would never have taken p'hce, and that much of the distress > which America is faced today E-hfinmbe ‘leip reiated to economics in bank op- ! ettRlons to meet the new situation ybr E:xm about by low interest rates and ' J iw 2 4 bank earnings . Lane Young, chairman of the Ag- ltural Commission. reported that 45 ‘Bfate bankers’' associations now have gricultural committees and that the county key benker list of the commis- sion now numbers 2541 names. Many other high spots at the meeting have -already been mentioned in The Star, as noted on the return from the Bouth; of Prancis G. Addison, jr., Wash- ingtop’s member of the executive eouncil. Trading on Local Exchange. fCapital Traction stock displayed fprther strength on the Washington k Exchange yesterday when it the week at 24. Yesterday's ding in both stocks and bonds fol c u X Vjashington Ges 6s “B"—$1000 a 105 c Electric Power ptd.— Mt 11045, 25 at 110, 10 at 110. District National Securities pfd.—2 512% t 68. rl«..mn.m Linotype—10 at 80%. 10 t 80, 10 at 80, 10 at 80, 10 at 80%g C hpital Traction—5 at 3 Pptogmac Electric Power pld.— at 110. lymbia Sand & Gravel pfd.—5 at 93 oles Drug Stores pfd.—10 at 102, 40 .9t 102, 17 at 102 &Eertcln Security & Trust Co—10 at 31, (Gpital Traction 55—$1000 at 80%, $2,000 at 80'%. * 1t 'was announced that the American Pite Insurance Co. directors have de- clared the 3 per cent quarterly divi- ! dend, payable May 1 to stock of record April 25. Gleaned in Financial District. Chairman B. L. Colton of the PFidu. eciaries 4. 515% cesident, A. C. Robinson of the sav- | customers as to the mo- [ er of the most discussed prob- | Section of the District Bank- ors’ Association announces that Ed- ward J. Reilly, legal editor of Trust Magazine and counsel of Bankers’ Conclave. Although business is at low ebb there i are signs of improvement both in sen- | timent and in fact, according to re- { ports from each of the 12 Federal Re- serve districts made at the annual con- vention of the Association of Reserve City Bankers held at Richmond during the week. The report of the Business Committee led all others in general public interest. Improvement in the cotton textile industry in the Richmond, Atlanta and Philadelphia districts was cited by the Business Conditions Committee as en- couraging factors in the economic i situation. Stocks are low, demand ex- iceeds production and the feeling is better than for a year or more, it was said. showed increased industrial activity since the first of the year in excess of the normal seasonal improvement, particularly in cotton and woolen goods, and shoes and a few other lines. Other Gains Reported. Other improvements reported were in knit goods, leather and silk in New England; chemical products, leather and building materials in the Phila- delphia and Richmond districts, and pig iron in the Cleveland, Chicago, At- lanta and St. Louis districts. On the other hand, the reports in- dicated a continuing depressed condi- | tion in the coal, oil, lumber and metal | industries, and in the manufacture ot | almost all types of machinery, includ. ing implements. Iron and steel pro- | duction has shown a distinct seasonal | improvement, followed by a moderate decline during the last three weeks. | Automobile production, although stul | materially below the last two years, has ! shown a marked increase since the first of the year, the committee pointed out. Farm Outlook Hopeful. Agricultural conditions were scribed as mixed. Weather conditions have been generally favorable for planting, and crop prospects appear to | be good, it was said. Prices for farm | products were found dfcouraging, but farm labor abundant, costs low and | crops cheaply produced. * Conditions for | raising live stick were declared gocd. Some sections, notably the Sowth and | Southeast, still suffer from the effe of last year's drought, but on the whole | the outlook is rather hopeful, the com- | mittee held. | | i | ROYAL DUTCH-SHELL | WANTS CONSERVATION of Group Pledges Assistance to Ad- visory Committee. i Managing Director By the Associated Press { NEW YORK, April Dutch-Shell group is in “hearty sym | pathy” with™ the efforts of the Ofl | States Advisory Committee to stabilize | conditions in the oil indust: | ber, one of the managing directors of the Dutch-Shel] group, said today. { “The Royal Dutch-Shell companics have long advocated and practiced a policy of conservation,” sald Mr. God- ber, who arrived in New York recently from Europe. He added that the group would do all in its power to aid in the furtherance of the advisory committee’s program. “The efforts of the Oil States Adv! sory Committee to provide a plan ! which the industry can put itself on a so;xflnd. cconomic " basis,” Mr. Godbe | said, {out of many present difficulties, prora- tion has been invaluable in limiting output and preventing waste, but pro. | ration should be made fully effective by an arrangement between th: As the potential supply is incr the development of new fields, 25 -The Ro; | pooi ought to be read; | total does not increase beyond that | which can be absorbed by the demand. | The plan the committee offers is sound and workable and should appeal to every constructive element of the in- dustry. Considerable progress has been made and if proper support is given the movement, it can be pushed to a suc- cessful conclusion.” e¢ 50 that the Aoci;uon at the Columbia Country Morton H. Wilner has been ap- pointed general agent of the Judea Life Insurance Co., for Washington. He is a graduate of the Pennsylvania and specialized in life insurance in the i budget (to be introduced April 27) is | with no material change in the business F. God- | ‘seem to offer an admirable way | amounts allotted cach State and each | Whartcn School of Finance. Norman E. Towsen, assistant treas- urer, has prepared a most interesting article on “Progress Made in 193 He is very careful to separate general business from the stock market and is convinced that the worst of the busi- ness depression is Washington Chapter, A. I. B, will hold its second Sprm" Prom at the Columbia Country Club, Priday, May t# same meeting it was announced!8, between 300 and 400 mcgpbers be- that'plans were completed for a most ing expectedy An entertal t of teresting ‘Spripg meeting of. kb, as- acts is incl ';.fly. New York, and of the Na- x:fll Bank of New Jersey. He is a speaker. 'x'u District Bankers' Association has resolutions to the memory of ©O. Walson, one of the city's and most beloved bankers. At on the PIOIARM .. o { p- | plies already has caused France to raise | within the week from 10 per cent to 20 1pcr cent the quantity of foreign wheat {permitted for use by millers. Trade | | prospects are better than a year ago. | unless wheat reserves about ta be re- | |leased by the Farm Board upset the | market. i | Steel prives are lower; iron fell be- {low the lowest levels since 1915. Non- | { ferrous metals receded despite the fa- | | vorable conclusions reached by mem- bers of both the tin and lead cartels. | Dissidence among Dutch rubber pro- | ducers and the East Indian government | has discouraged buyers. Pessimistic re- ports sifting through from the Usited States h: jprovement noted in European jthat the United States must lead the yworld out of the present economic de- pression. Apprenension Over Spain. The new Spanish government rapidly | jover its stability. The army is po- | itically minded, but heretofore, only the | officers have entered into the intrigues | which accompanied changes of govern {ment. Now the soldiers are realizing| The New England district report |thal they are a part of a republican | government and are in a position to ert political influence. Trade unionist are with the new government. Communistic | opinion among the Andalusian laborers and Viscaya miners is a source of ap- prehension, especially in France, which | is notably anti-Soviet. i The new government has signified its | | intention to abandon the unused Morgan | 5 credit of 60 millions. Otherwise it is| expected to recognize all national debts. dares to do anything to antagonize money markets in New York and in! Eurcpe. Poreign trade declines in March are viewed with concern: Prar Exports..., 2 Tmports. .. 1% LONDON.—This has been a week of depression. Anxiety concerning the nce. the most disturbing factor. The upset Spain and consequent reaction, the |very unfavorable trade returns for | March, ccntinued unfavorable railway | | earnings and the French antagonism to | the Austro-German affair were con- tributing factors. Coal Areas Improve. Hopeful signs include a slight im- | provement in the Welsh and Yorkshire coal areas, some seasonal expansicn in iron and steel, and the steady position of wool. Cotton is quiet. Rayon ex- ports are sagging, but hcme demand is good. Rubber, on the other hand, has dropped to a new low, non-ferrous met- als are erratic, commodities in general are_depressed. | The Spanish situation is not causing undue alarm. So far as London is con- cerned, its financial effects have been confined to sharp depression in Spanis exchange and weakness in securities of | British companies working in Spain. the | most important being the Rio Tinto Copper_Co. PARIS —Another week has passed cutlook. ‘Trade and industry both are active. The suspension last week of the depression acceleration has carried | over, but there is still no real sign of | mprovement. _Unemployment returns | show no materlal increase. Weekly ilway receipts are running 8 per cent 0 10 per cent and carloadings 3 per cent to 4 per cent below 1930. Money is plentiful, but people hesi- | tate to put it in new ventures. March | security issues were very much below February issues. The deflation cycle is developing, with particular reference to wages. Following recent reductions in the coal mines, the textile manufacturers of Northern France have cut wages among the million or more workers. Labor is discontented but considers reduced wages preferable to unemployment, to- {tal or partial. | Food Prices Advancing. A peculiar_conditicn has developed in France. While wage reductions are spreading rapidly. and are being ac- cepted with comparative calm, the price of food is still going up. Whereas foodstuffs in Germany have registered a fall in price since the boom period of 1929, of 20 per cent, in France they increased 10 per cent between 1927 and 1929 and another 10 per ceat in 1930. And wage reductions, which, in other countries, fcllowed price reduc- tions, are, on the contrary, being gen- eralized in Prance despite price in- flation. Domestic wheat prices are at present about three times higher than world prices‘ and this fact in itself shows how unbalanced national econo- | | subsistence level my is. The business outlook in France thus is decidedly not h:peful These wage cuts and resuliing cur- tailed buying power will not improve business ‘at home, but they should better Prance’s competitive position in export markets. Though still well be- low March, 1930, Maxch foreign trade, due to seasonal activity, already shows signs of revival. Imports for the first quarter were off only 16 per cent, but exports dropped to 72 per cent of the volume last year. It is interesting that rawstuff imports were down 25 | por cent, manufactured exports 27 per t nt. BERLIN.—Despite of the stock market stback, the business undertone is con- fident and is supported by marked im- provement in textiles by the March gain of 17,000,000 in manufactured ex- ports, by the record export surplus of 62,000.000. .» France’s, subtle. new.., ARSASQRIND: 1 | | | FORNATIONAL PLAN Simply “Muddling Along” Seen Fate of U. S With- out Definite Scheme. BY J. R. BRACKETT, Associated Press Business Writer. NEW YORK, April 25.—Without a e impaired the recent im-|national plan to control and balance | enormous amount of offering for income stock | production with consumption, America | tax purposes, with which was associated | markets, since the feeling still exists|can muddie along, but that's about all,|an effort to preserve capital by ex- says, Dr. Frank D. Graham, economist of Princeton University. Dr. Ernest L. Bogart, president of the American Economics Association and professor at the University of Illinois, foresees possible use of governmental iis organizing. but apprehension is felt| powers to cure maladjustment in the! distribution of America’s roduc- tion, but he opposes socialistic controls to prevent depressions or regularize em ployment. Dr. Bogart and Dr. Graham are tv of the noted experts who have given the Associated press their views on the o |idea of a national plan for America|in keeping their heads above water not co-operating wholeheartedly | which would co-ordinate and direct the | ULtil & change in business sentiment energies of our industrial system. Can’t Begin Too Soon. Dr. Graham believes we cannot. begin planning too_soon. t will not be easy to establish even fairly ~distant _approximation to Utopla, and we shall have to watch the scylla of rbgimentation as we seck to Financlers are reassured because they | Earyhitis Of " e says | | realize that the young republie hardly | * oane creoarybdis of chaos,” he save “The great virtue of ‘laissez faire’ is its very painlessness, for where there is no pain, the plan cannot go wrong. | But with the bulk of our own popula- i tion on the poverty line, and the great mass of mankind little above a bare millions of worker: annot find an opportunity to work at making the things they would fain con. sume. This is surely tragic ineptitude. ‘With all our boasted powers of organi- | zation we left the productive powers of these workers go to waste while they themselves enter ever more deeply into misery and degradhtion. “Economists have been studying busi- ness cycles intently now for many years, and yet do not know with any cerfainty what are their causes, far less their cure. “It s not to be expected that any perfect plan can be evolved, but much could be done if the way were made smooth for the acceptance of informed opinion. To this extent a national plan s urgently required, and we cannot formulate it too soon.” Up to Individuals. Dr. Bogart views the economic struc- ture as’an evolutionary process from “muitiplicity of small scattered units into larger co-ordinated industrial, com- mercial and financial enterprises.” n his complex system “the impulse that starts any one into activity has been re- ceived from another part, and no part ‘The guidance of this complexity is left to the private individual who is partially informed by prices and other indicators. “Frequently, however,” he says, “the industrialist is like a man driving & powerful car at a high rate of speed, who, unable to stop when the red light goes against him, crashes through to disaster.” Dr. Bogart doubts that State direc- tion of industry is proper, believing rather that we must have more knowl- edge and “educated leaders who will be | guided by it.” “REGULAR DIVIDEND. NEW YORK, April 25 (Special).— Grand Union Co. has declared the regu- lar quarterly dividend of 75 cents per share on the convertible preference stock, payable June 1 to stockholders of record May 18. the customs union is disquieting. It | proposes that grain shortage in France, Germany and Italy be covered by pur chases from the Danube basin. This up- sets Germany's aggressive plans for winning Rumania and Yugoslavia to the pact. Hungarian preference already is arranged. It also postpones until after the Geneva session (at which the plan is to be aired despite Germany's wishes) the conclusion of Austro-Ger- man negotfations and the working de- tails of the customs union. Two particularly stimulating factors which have influenced business think- ing in Berlin and industrial centers are the Lloyd-Hapag order for four new motor ships, and the remarkable pick- up in the automobile industry in the last few weeks. Negotiations between Europe’s principal rayon producers, just started in Berlin, are likely to result in a voluntary ¥mport contingent allowing Jtalian and Dutch producers a 20 per cent quota on the German market. If completed. this will mark a trend toward control of the uction and market- ing within this ®ip-till-now inadequately regulated industry. Business has been following the fluential stock exchange house has been forced to suspend. Liquidation has been heavier than since the month of December. There has been an expansion in the volume of transactions only as the market has moved in a downward direction. | The selling of common stocks has | been of a different character from that | | which precipitated the fall in prices {late in 1930. This had been brought about, by the unloading of overburdened | speculative accounts as well as by the | clearing out of collateral in the pos- session of banks whose position was (known to be precarious. There was |also in November and December an | | changing shares of corporations, whose | | condition was steadily becoming weaker, !into those of concerns able to carry on | land pay regular dividends indefinitely, | Shareholders’ Income Cut. ‘What we are now witnessing is liqui- dation by holders of securities who are | | as much concerned over the stability ! of their income as that of their capital iThls has been accelerated by unpleas- ant reading from the financial reports |of the last month of the trials of in- dustrial and transportation companies and an upward trend in the statistics| of trade put in their appearance. The meaning of the numerous divi- { dend chariges to the individual, who has | | been strongly stock-minded in the last | | few years may be illustrated by assum- | ing that Mr. A had 100 shares each of | {New York Central, Baltimore & Ohio, Anaconda. Kennecoot Copper, West- inghouse Electric, Allis-Chalmers. Mont- gomery Ward, National Cash Register, | Remington Rand, Vanadium, Chrysler and Studebaker Corporation. Within, | six months all of these companies have | been paying their highest dividends in | | many years. The total income from | | them to Mr. A was $5,695 per annum. Today, with 5 of the 12 corporations | Eaving passed their dividends and the other 7 having materially reduced { their rates, the present annual money return to him is $2,250. In other words, Mr. A is now receiv- ing on this section of his investment portfolio, which is quite typical and in- cludes many shares that are to be found in fixed trusts, only 40 per cent as much income as the same shares gave him throughout 1930. Drive on “Blue Chips.” Another phase of the liquidation is that which has affected the market position of the so-called “blue chip” shares. The pressure against them, both from professional and from in- vesting sources, has been steadily in- creasing. It has been due to the fact that, while the current average income return on all stocks listed on the New York Exchange is about 71, per cent (it may be said that in 1920-21 it was 1 to 17> per cent higher), that on a group of about 65 “blue chip” issues is slightly over 4 per cent. Furthermore, some of the poorest of the March quarter statements of earnings have been those of companies whose se- | curities are quoted at a high premium | over the general market average. | There has been a rather outspoken bearishness this week toward a num- ber of the most popular of the indus- trial and public utility shares, on the score of the low return available from them in a season of opportunity for those who have the courage to invest their funds at rates of income between {6 and 10 per cent. Trade Prospects Gloomy. Neither statistics nor trade reviews this week give encouragement for better prospects in business this Spring or Summer. The measures of industrial activity show a alight improvement, not one comparable to normal. Wholesale prices have again declined. They are now nearly 21 per cent lower than a year ago. Iron and sf production has receded. Prices of steel are lower. Cop- per metal has been available to con- sumers at 9> cents a pound. Cotton and wheat show no permanent rally. Some of the commodities that have been artificially supported in the foreign mar; | kets are lower than ever. In view of these conditions it has re- quired considerable courage of men like President Gifford of the American Tele- phone & Telegraph Co., President Far- rell and Chairman Taylor of the United States Steel Corporatios, and Fresident | Atterbruy of the Pennsylvania Railroad to confirm belie{ of others that the times were getting better and that while improvement will be slow, this country will cventually experience the same rapid recovery from the present depres- sion that has occurred following every {a loan be made in excess of 50 per cent preamble, “to provide capital for agri- cultural development, to create stand- ard forms of investment based upon m mortgage, to equalize rates of in- terest upon farm loans, to furnish a market for United States bonds, to cre- ate Government depositaries and finan- cial agents for the United States, and for other purposes.” The land banks organized and oper- ating under the provisions of the act, and the national farm loan associations through which loans of the Federal land ranks are made, are chartered by the Federal Farm Loan Board. The board hias general supervision of the Federal Farm Loan Bureau, a bureau in the De- partment of the Treasury charged with ihe execution of the act, and the board 2lso has broad supervisory authority ard regulatory powers. The banks and oclations of the system are examined 7/ land bank examiners appointed by he Federal Farm Loan Board. The 12 Federal land banks are co- operative institutions. Practically all of their capital stock is owned by national farm loan associations, whose membership is restricted to borrowers from the Federal land banks. The board of directors of each bank consists of seven members; three are elected by the national farm loan_ associations, ‘hree are appointed by the Federal Farm Loan Board to represent the public interest and the seventh is selected by the Farm Loan Board from the three nominees receiving the largest number of votes from associations. Time Limit on Loans. The business of a Federal land bank is restricted to making amortization loans, secured by first mortgages on farm land. These loans may be made for periods of 5 to 40 years, repayable in annual or semi-annual installments of principal and interest. In no case may of the appraised value of the land and 20 per cent of the appraised value of the permanent insured. improvements thereon. Appraisal is made in each in stance by a land bank appraiser who, by law, is a public official and who is appointed by the Federal Farm Loan Board and assigned to the Federal land bank district in which the applicant | resides. No loan may be made by a Federal land bank to any person who is not at | the time or shortly to become engaged in the cultivation of the farm mort- gaged. Loans by Federal land banks may not exceed $25,000 to any one per= son and may be made only for the following purposes: (a) To provide for the purchase of land for agricultural uses; (b) to provide for the purchase of equipment, fertilizer and live stock necessary for the proper and reasonable operation of the mortgaged farm, the term “equipment” to be defined by the Pederal Farm Loan Board; (¢) to pro- vide buildings and for the improvement of farm lands, the term “improvement” to be defined by the Federal Farm Loan Board, and (d) to liquidate indebted- ness of the owner of the land mort- gaged, incurred for agricultural pur- poses or incurred prior to January 1, 1922, | Land Bank Loan Methods. | All Joans now made by Federal land | banks in the continental United States | are made through national farm loan | association: Application for a loan is made to the association. which investi- gates the security offered and the credit standing of the applicant. If the appli- cation is approved by the association. it is transmitted to the Federal land bank, which, if the application seems satisfactory, refers the matter a| land bank appraiser. Upon favorable ‘The association, | granted to its menwer, indorses and thereby becomes liable for the payment of the mortgage. Att the same tme, | the, association subscidbes for ca | stock in the Federal 'land pani:. | the amount cf 5 per cc\1t of the loan obtained, which stock is%, d the bank as collateral sedurity for the | payment of the loan. Bond Sales Vital Faa‘ors. Aside from its capital, which are loaned to farmers eral land bank are obtained through the sale of farm loan bonds. exceeding 20 times its capital and sur- Federal Farm Loan Board be(or\ must be based upon a tender of col | lateral security not less in aggregate amount than the sum of the bonds proposed to be issued. This collateral must be in the form of first mortgages qualified under the terms of the act, or | United States Government bonds. It |is held by a public official known the farm loan registrar. There are 12 farm loan registrars appointed by the Farm Loan Board, one located in each Federal land bank district. Thne total outstanding bonds of Federal land banks as of December 31, 1929, was $1,190,260,880. to being primarily liable for its own bonds, 1s liable, under the conditions | stated"in the law, for the principal of, and interest on, the farm loan bonds | issued by all the other Federal land banks. ‘The banks are required by the act to | carry reserve accounts. Each bank must | carry to reserve semi-annually 25 per centum of its net earnings until the reserve account shall show a credit | balance cqual to 20 per centum of the outstanding capital stock of the bank. | After the reserve has reached 20 per centum of the outstanding capital | stock, 5 per centum of the net earnings | must be added thereto annually. In addition to this reserve, each bank sets up special reserves against delin- quent installments, notes receivable, ac- quired real estate, etc. Joint Stock Land Banks. ‘The Farm Loan act also provides for the creation of joint stock land banks with private capital. These banks, like the Federal land banks, are regu- larly examined by examiners of the Federal Farm Loan Bureau, and are subject to the rules and regulations of the board. Capital stock of a joint stock land bank carries liability, similar to that of stock in a national bank. A joint stock land bank makes loans direct, and not through a national farm loan association; it may make loans only on the security of first mortgages on farm land and the proceeds of such loans may be used only for purposes related to agricultural development. There is no joint responsibility among these banks; each is individually liable for its own bonds and other obligations. A joint stock land bank, before doing business, must have subcribed capital stock of at least $250,000, of which at least one-half must be paid in and the balance subject to call. Its bonds, which must be readily distinguishable in appearance from Federal land bank bonds, may not be issued in an amount exceeding 15 times the capital and surplus of the bank. A jomnt stock Jand bank must establish reserve ac- counts under the same requirements that govern a Federal land bank, Mr. McQuade concludes. | | NATURAL GAS LINES EXTENDING WIDELY| Field of Consumers Growing mp-f idly Despite Slump in Stocks. | Special Dispatch to The Star. NEW YORK, April 25.—While nat- ural gas stocks have steadily slipped, until this week they stand at record low prices for the year or longer, con- struction gangs have laid mile after mile of pipe and draftsmen have drawn plans which if carried out will make this_country a spider web of natural gas lines. - By the end of the year Chicago, St. other major decline. Business Reacts to Wall Street. Naturally those in Wall Street feel the bluest, for the values in which they trade and which are always visible dur- ing business hours show the greatest amount of shrinkage. It is true, never- theless, that the present stagnation of industry Is as much due to the disap- pointing turn in the market for securi- tles for the past six weeks as to any other cause. Business reacts to Wall Street more and more year by year. This fact is readily explalned in the enormous increase in the distribution of trend of closer cooperation ' between | corporation securities during the last lal American and German concerns, | Gecade. Permanent stability or a return nrfiu already affected the electrical, | of health in business cannot be expected chemical and related industries. This | so long as we have day after day such week it brought Krupp and United | violent declines in common stocks and States Steel into the picture through |in railroad and in industrial bonds as their new rustproof steel licensing | have occurred since the market turned agreement. downward two months ago today. The Germany's plans for cooperation in | failure of a house that has been identi- the Chadbourne sugar curtailment | fied with large underwriting and dis- scheme are not affecting the country | tributing operations may have the effect evenly. Though this wl:‘r’nremdmm of clearing the air for a while and hold- by the government, it caused some ing down the new crop of rumors, - e N b Louis, Memphis, New Orleans, Atlanta, Birmingham, Denver, Lincoln, Des Moines, Sioux City, Davenport, Fort Dodge and possibly Indianapolis will be using natural gas from the two great Texas and the large Louisiana reserves. Meanwhile, some of the Eastern flelds, such as Pennsylvania, West Virginia, Kentucky and Ohio, have diverted their flow toward Atlantic seaboard cites, like Baltimore, and upper New York State wells are being brought in, which may supply some of the New England communities with natural gas. South and West pipe-line programs now drawn, but mnot officially an- nounced, indicate that cities along the Atlantic seaboard below Baltimore soon will be burning natural gas, while the huge wells in the Kettleman Hills dis- trict and elsewhere along the Pacific Coast continue to pour out increasing supplies for California cities and towns. (Copyright, 1931.) Shell Petroleum Corporation has re- ceived_an order from American Air- ways, Inc., 1 1.9&0.m gallons of avia- | Trust Shares, the largest of the fixed | FIXED TRUST STAND HELD CONSTRUCTIVE Distributors Group, Inc., Issues Statement Welcoming Attitude of Exchange. By the Associated Press. NEW YORK, April 25.— Distributors Group, Inc., sponsors of North American trusts, today issued a statement welcom- ing the attitude of the Stock Exchange toward drawing the public's attention | toward “possible dangers connected | with fixed investment trusts.” The statement follows: “The expected action of the New York Stock Exchange is looked upon by this organization as a needed and con- structive move. ‘The sponsors of North American Trust Shares have al- ways endeavored to present all the cts affecting the interest of the in- vestor in the clearest and most com- plete form possible, and standardization of practices which will undoubtedly re- sult from any action which the ex-: change may take is welcomed by this cm_}{gfiny e statement was prompted by a discussion of fixed trusts by Richard , preside! exchange, in 5 | industry a chaice to live pital in pledged with he funds \ r a Fed- chiefly which may be issued in an amow 1t not plus. Application must be made td 1h: | bond issue is made and the applicati\n Each Federal land bank, in addition | | “Otherwise, lowing it to kill itself by modern cut- | throat competition. | _The present chaotic, haphazard and | unorganized mcthods of doing business, jaccording to Mr. Spreckels, are “doing {more to promjote sochlization of our ! industries them all the socialistic and | Soviet propaganda could complish in the next Jaundred years.” Mr. Spreckels” position is s0 unusual that it is worth & review. Although a successful hanker and industrialist him- self, he has never been orthodox. He is a battle-gcarred veteran of many an industrial d political fight. Wanits U. S.“fo Take Hand. In commyenting on the present busi- ness chaog, Mr. Spreckels said: “I have told you that I believe that matters will become increasingly bad in the Unm‘il States unless the Govern- ment offid ials step in and require in- Justrial §:aders to discontinue their Ntmcuve tactics.” asked ' him what part, in his opin- ion,” the ¢Government should play in | restoring J rosperity. “The Ni itional Government should not ignore| the destructive tactics pur- sued by ma ny industrial concerns in the. present od of depression and wide- | spread uwex 1ployment,” he replied. “The desire on 1e part of some industrial leaders to s ‘cure the lion’s share of the greatly decn 2ased volume of trade has rAe;:I?hdn ig w?:y ‘many i) g are selling belou)._ the cost of their duc- tion. “Now mark: my words, if this destrucs tive policy i permitted to continue, wages will beé radically reduced, much vested capital § vill be destroyed and the number of uny mpl will be greatly |increased. The taxes collected by the | Government oia corporation and indi- vidual incomes § ¥ill be sharply reduced and make it neq °ssary for Congress to increase tax rata ‘Do you beiA 've the Government should take a :@ ‘onger stand than it has up to date?” 3 asked. Chaos Is' Threatened. “Absolutely! * need for govern- mental supervision | and direction of all n the present cri the World War. ‘B 1 situation today affects not only the &y 2illions out of em- ployment, but threazd s to plunge the country into a state’«d’ chaos. War with a foreign nation insj iires all people to co-operate with thei §* government in the common cause, ‘whereas internal conflict of interests ¢ Uvides the people and embitters those 1 yho suffer priv tion. In these circum: gan ernment is in duty bc bnd to all the people and to prevent nation, destructive con getition and in< Justice. “Is there a real nee plan for industry, su Government?” I asked. ‘The emergency of must be apparent to ev recognized leaders in . and private life have n a constructive progran problems cannot be s unless the interests of the country realize th terdependent and that in harmony in order { which is best in our ¢ “But the Governme: large sums of money producing Government this not help to meet t ventured. Temporary | elief. “Billions of public " 3ioney expended on non-incorie produc § ag Government projects will hring only* temporary em- ployment for a.certain @ umber of those out of work” AMr. S reckels replied. “And it will also sacrem se taxes to pay interest on such exyem litures and re tire the principal. Wiaj . is most need- ed in the United States® is stabilization of agricultural and othes ° industries on a _profitable basis, so tiu it employment of all labor may be reage nably assured. Production should be rej ulated in ac- cordance with demand 4 nd fairly al- located between competita s, thus over- coming the tendency of some to sell below cost in order to fi \crease their olume regardless of, the loss to E for a national prorted by the } the situation sryone. Yet the American public ot brought forth ). The existing plved untll and iall elements in i _they are in- all should work o preserve that Wilization.” »t is expending on nan-income projects—does re situation?” T of “Do_you believe that un der.such a plan both capital and lala ' could be profitably employed at this , time?” “Capital and labor must by ° profitably employed and American @ 3ricultural interests must be put on a s ’'und basis without delay,” was his quick, rejoinder. disastrous cor\ jequences may result and undermine | the very foundation upon which nat/} nal se- curity rests. All individual s ¢ fishness must b promptly curbed by l\le Gov- ernment. Why? "Because it is f he only agency having the power to compel obedience to fair and constructi1y > rules of conduct by all elements in thew coun-: Ty n a ‘Word, what you are aftcu’ is a strong, vigorous and determined , Gov< ernment, which will bring about inde- pendent co-ordination of prodi wtion. and distribution—is that right?” Needs Central Direction. { “The -United States needs a cer Wral nt of the te: ly governmental directing force to b about. co-ordination, because most in- d fixed investment trusts can be unaware of the fact that many trusts have features which do not properly protect the g dividuals appear o be unwilling to #:¢- cept .the Jeadership of nlxam of tht ir own . group.. Nor is it ly that t! Government departments will perm members of any group to agree upc obviously economic methods of bu i ness conduct even the peop! gy interest would be served thereby. y 3 B Corporation¢bonds and notes due M te $130,911,380 compared with $181,434,990 in April ang $70,062,690 last year. It wi said in Wall street that the maturitie her than fhich scems to have paralyzed inte e asoline, at 10 air- Boris . the il 1 ¢ will provide little financing that wi has been pro in { maturity, “Let us hope that the country m on come .out of the state of delirh lesa e poyright, N Y t. action. for well 2 931, by the North Amét 5 _ wspaper Alliance.)