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Show MONEY & MARKETS By James McMullin The Teleejraai s Exctnttv Observer Alonf W.U Street NEW YORK New York bankers bank-ers ars privately up in arms at the Federal Deposit Insurance corporation's hint that the premiums pre-miums paid by member banks are likely to be hoisted unless a number num-ber of banks take positive steps to establish and maintain a ratio between deposits and capital funds of not more than 10 to 1. Deposits have been creeping up rapidly with recovery and capital funds have not kept pace. Undercapitalization Undercapital-ization was a basic cause of many bank failures during the depressionand depres-sionand the F. D. L C. evidently aims to lock the door this time before the horse gets out. Financial leaders agree that the precaution is wise in principle, but insist that it is foolish to apply a fixed yardstick to all banks. Institutions with a large proportion propor-tion of time deposits, for instance, should not be compelled to comply com-ply with the aame safety ratio as others with a higher percentage of demand deposits. But the main complaint is that an uppance of premiums would be grossly unfair to New York banks, (a) because all of them "have a deposlt-to-eapltat ratio tn side the one set by the F. D. I. C. and (b) because they would nonetheless none-theless have to shoulder the main burden of higher premiums based on total deposits instead of just Insured deposits (up to I5OO0). Trouble Is that the F. D. L C doesn't seem much impressed by their arguments. Unfeeling wags suggest a bankers' picket line around the agency's offices. Two former high executives of a large American corporation which has been plagued by sit-down sit-down trouble recently returned from a European trip, in the course of which they spent four days at Rome. While there they wanted to meet Mussolini. Instead of going through the customary diplomatic channels, they went to the local Roman representative of the company com-pany in which they are large stockholders and asked him to fix It up. He told them they were crazy, that no stranger could see il dues on less than two weeks' notice. Their connections and antecedents an-tecedents must be carefully checked up first. The visitors retorted re-torted that in any case Mussolini should be advised that if he wanted want-ed to see them he had better hurry up about it, because they were only going to be in Rome for a few days. The next morning they were surprised and delighted to get ' word that they were to see il duce that afternoon. He received them most cordially in his huge office, understood perfectly who they were and talked intelligently about their industry and its strike problems. prob-lems. Toward the close of the interview inter-view one of the Americans put a direct question to Mussolini: "How in the world did we get in here? We wanted to very much, but were told it would be Impossible." II duce replied with equal candor can-dor that it was because he wanted to learn mora about sit-down strikes In the United States. He then went on to say that such labor tactics were being widely used in Italy Just before he took hold and intimated that he knew a lot about mat tecnnique. His callers found food for serious se-rious thought in these remarks when they got outside. They felt that Mussolini had given them a clear picture of what caues fascism. fas-cism. New Yorkers who know about this incident find a parallel in our present labor situation which causes them furiously to think what the future may have in store for us unless air-edited labor ch' can keo teir followers fol-lowers under better control. Cooperation between Pan-American and Imperial Airways in developing de-veloping their transatlantic air service has been remarkably smooth and sincere. While the American and British lines have tackled engineering problems independently, in-dependently, they have tried to help each other wherever possible. The spirit of hard-boiled competition competi-tion is notably absent This attitude will probably continue. con-tinue. Although one or the other may develop a successful plane for passenger traffic much sooner than its friendly rival, it is not likely to "Jump the gun." When transatlantic passenger service starts, it will be Inaugurated by both lines simultaneously (as in Bermuda). ' New York aviation experts say that regular transatlantic passenger passen-ger schedules are at least a year away, but that mail service should be functioning smoothly much sooner. The plsnes used in recent successful crossings sre not suitable suit-able for passenger work too small and uncomfortable for such a trip. The Sikorsky used by Pan-American Pan-American is four years old virtually vir-tually obsolete in many respects. But eight huge Boeings bigger than the Pacific clippers are being be-ing built for Atlantic passenger traffic. Keen New York analysts figure that business activity and security secur-ity prices over the next several ; months are closely keyed to the adjournment of congress. If the so tons quit by the middle of August, Au-gust, a strong bullish trend ia business and the markets is expected. ex-pected. If the session strings out to September or beyond, dull markets mar-kets and listless Industrial operations opera-tions are predicted. The reasoning behind this view is that congress cannot possibly quit in August unless it definitely declares its independence of the White House and refuses to enact the latest Roosevelt legislative . program. That would mean a minimum mini-mum disturbance of private enterprise. enter-prise. Conversely, it is felt that a long i session would confirm the president's presi-dent's dominance and probably " bring legislative action on hia "radical" measures which is an alarming prospect to right wingers. wing-ers. A New Yorker who happens fo be a large stockholder in the leading lead-ing bank of a New Jersey city sat next to Jesse Jones at a dinner recently. The R. F. C. also hss a sizable financial stake in the bank. Tbe subject of deposit-to-capital ratio came up. This bank's ratio is more than 10 to 1, but It has more than 70 per cent time deposits. de-posits. The management is satisfied, satis-fied, but the.F. D.ICis not and that phase of the matter was touched upon. Said the New Yorker: "Mr. Jones, you are the real boss of that bank. Maybe yon can tell us how to stop people from depositing deposit-ing money with us. Evidently that's what the F. D. L C. wants. ' but we can't figure out bow to do it." (Copyright, 1937, for Th TslearraiaJ |