Salt Lake Telegram | 1922-08-28 | Page 7 | Prosperity Extends to Banks

N Prosperity Extends to Banks -By Ira C. Tichenor GON'TRAEYtoMhe generally acc-pted idea that banks jnvarinbly make .money, even luring periods of "hard times," or when businesses generally are operating either at a loss or with the profits discouragingly small, the great majority of the banks of the country last year wore compelled to writ, oft uch heavy loaaea becaua. ef the Inability of borrowera to repay loan during the climax of the deflation period that often nothing was left for the etockholdera of tha financial Institution. This year, however, bank generally in making up to aom. Extent tlx losaea amstalned In 1911. and In aplt. of the lowering of Intereat rate. One of the plana that ha been adopted la a decided reduction In expenats. and which offseta to a considerable extent the lower charge tor loans. One of the chief causes for. th. prevailing season of prosperity of banks Is the advance In th. market prices of gilt edged securities. Including government obligations. In the case of Liberty bonds, which tha banks rtglnally purchased from patriotic motives and later Sis a good investment nd at prices considerably below their par value, th. profits hav. been immense. In respect t. New Tork City banks. It is stated that their investment In high grade securities sine. th. first of the year have Increased by about f 500.000.000, bringing the total up to more than tl.00. 000.000, while since lecember last the average appreciation In these holdings has been about 10 per cent . j In addition, the loaning Account have been Increasing as a result of the expansion of general business affairs and th. increasing activity of th. bond eCnd stork markets, while th. losses this year have been comparatively small s and few. I It can be accepted as a certainty that unless banks are prosperous the ( country generally cannot prosper. Now that even apart from the advance ' . In Investmenta there are enough favorable Influences at work to show i satlnfactory profits for banks, the country generally must be moving aeong In a prjilfylj j