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Show Tnj(r"' 'ti 'gj fbe jialt fake tribune Sunday Morning, August 1, 1982 t' II Page 14 Section B Up and Down the Street Playing Financial Name Games By Robert H. Woody Tribune Business Editor It has marble columns. It has a big stainless steel vault in the back. There are teller cages. Walnut desks. its a bank. Not so. Its an So, industrial company loan that Another firm pre-stigo- offices Representatives of financial shown meeting in late 1990 & ; H makes loans and takes deposits. It pays interest on the deposits. It also issues checks that customers can use as drafts against their deposits. It provides trust services. A bank? Its a savings and loan association. The blurring of financial institutions in look as well as operations has long been something of a confusion to the public. Indeed, it has been a confusion to as federally mandated dereto M. white D. in institutions are regulators Borthick, shirt, regulator gulation removes boundaries that spelwith then-chie- f draft legislation that would modernize code. led out the operational disciplines and authorities of the financial institutions. Covetous of Identity But be sure of this, with many financial institutions severely stressed by whiplash of high interest rates, new forms of competiton by the securities industry, or the catchup of mismanagement, each has become highly covetous of its identity. said Edward Yardeni, repression, The banks, for example, for whom years, interest rates hold the key to an chief economist at the investment firm economic turnaround. mortgage lending is only part of their of E. F. Hutton & Co. Inc. He has If we see interest rates turn higher, business, do not like to be identified as as a condition defined repression we could see tLc recovery fizzle out, savings and loans, which are now between a severe recession and a said Commerce Malcolm burdened with billions in low interest on Secretary n depression, suggesting the Baldridge, who has said the adminismortgage loans outstanding. "economy is being repressed by an trations forecast appears too robust. Savings and loans, troubled enough, unfortunate mix of restrictive not casually like to be identified with do cut banks their lending deficit-bloatinMajor g prime monetary policies and rate this past week to 15.5 percent from a troubled industrial loans company. fiscal policies. the 16 percent level established a week Geography has something to do with Slow and Sure earlier. The action matched the lowest the confusion. What Utah law specifies Conceding it will be tough, slow prime rate since November 1980 when are thrift companies are savings work to brin& about recovery, Presithe key borrowing charge was rising companies in other states. dent Reagan said at his news confertoward a record 21.5 percent. What is called an industrial loan ence Wednesday, slowly and surely, The prime rate is the base upon which company in Utah is called an were working our way back to pros- banks compute interest charges on industrial loan bank in Colorado. perity. short-terbusiness loans to their most Mutual banks in the east are savings As has been the case for the past two creditworthy customers. Lingering Economic Slump ji Recovery Coming, But Slowly P. Rosenfeld AP Business Writer Even the most YORK J. NEW economic forecasts are poinglowing growth for ting to Z$h&t is hoped will be a recovery from a gainful recession. 1 In predicting significant economic tRecovery" this year, the Reagan this past week projected frvflation-adjuste- d gross national pro-Juwould average an annual growth (ate of 4.5 percent over the next 18 months. (I While the administrations midyear review forecast for economic growth (tails below the 6 percent-and-highexpansion that is typical in a recovery. (Some senior administration officials have called the White House outlook too By Steven jj I al er full-blow- Both Bane and Blessing in Tax Bill (eptimistic. S Percent Growth economists are Many private ( 2 percent or 3 percent growth in (the final half of the year, while the 2 to 3 pre-dicti- Congressional Budget said it expects the economy will grow at a 3.3 percent annual rate for the (remainder of the year. Meanwhile, there was little to signal robust recovery in the governments (parameter of future economic activity. The Index of Leading Indicators was (unchanged in June after rising in April (and May to end 11 straight months of (decline, the Commerce Department (Reported. (? The leading indicators confirm a (setback to the economy in June, said (Fred Deming, chief economist at (Chemical Bank. Down Note In June S V The second quarter was searching (along the bottom of the recession for (signs an upturn may be building, but Tjune ended on a down note, Deming (said. He expects a stronger recovery than many of his colleagues are (predicting, but added it should still be sluggish upturn. A week ago, the government reported the economy grew at an annual rate of fi. 7 percent in5.1the April-Jun- e in thequarter first (after sliding percent Cthree months of the year and declining (5.3 percent in the final quarter of 1981. But that report has not been universally hailed as evidence of an end to Of-(fl- - i ( House-Senat- mittee, increase on record close to (100 billion over the next three years. The mere fact that it is a proposal in an election year qualifies the bill as something of a rarity. But as with most tax measures, any summary description of it only begins to tell the story. Considered Impossibility One of its key provisions, calling for a percent withholding tax on most interest and dividend payments, was considered just about a political impossibility as recently as a year ago. Every time the idea was raised it immediately touched off a storm of protest. Banks, brokers, savings and loans, mutual funds and other financial institutions contended it would create an expensive tangle of new paperwork, the cost of which would ultimately have to be borne by their customers. Savers and investors, including the formidable forces of retired 10 pa (recession. We an imminent signs that the of remains (economy conference comproposes the largest tax e tXTttON rvov ti ''90 KMOOt public both terminals. Interested parties should submit a written letter indicating their interest and qualifications to operate this concession no later than 5:00 p m. Friday, August 15, 1982 addressed to Property Administrator, Salt Lake City Airport Authority, AMF Box 22084, Salt Lake City, Utah 84122. RCOWIMO LAW TOU f AM 800-423-45- SOUTHLAND UNIVERSITY 38 N. Craig Ava., OagL f Paaadana, CA SHOT WE ARE SEEKING: CONSTRUCTION LOANS Wit hoi if lake outs Pick pipe-layin- LAPSE STOCK to cut the holding period to six months suffered just such a demise in the conference on last summers Economic Recovery Tax Act. DRIVE TOURS, OE NEW USED UNE PARTS, IENSTHEN, ,500 INCOME. Investment Opportunity Gas Well and Lease 100 working interest 65 net lease other incentives including tax shelter. REPAW SHORTEN. IA1ANCE. last-minu- Should it survive, however, it would merely mark a return to the rules that prevailed from 1942 until 1976, when the holding period was lengthened in two stages from six months to a year. IUICK, CAOItiAC A PRINCIPAL ONLY DRIVE SPECIALISTS ma 5 twit EMERGENCY Y4-170- 801-359-53- 07 271-162- 2 900 W. 2 tt South., SaR LaAi Busnes Computer Microdata Reality6000 Data Base Operating System Basic Compiler 100 MS Disk (2 - 5GM5 Hefiex-- 1 Drives 3 8 ways 24 parte) (1) Tap; drive 800 BPI, 25 IPS) (1) 300 LPM Data Products printer 4 Microdata terminals (12) Beehive terminals Airruing at I'ii't. over priiiif anil collected at 18", (9) Micro B DM1-(3) Micro B1 2 JOINT VENTURES ON COMMERCIAL AND INDUSTRIAL PROJECTS, AND REPAIRING Submit proposal to: f KETCHUM'S 8 177i Sonlli .lai kson Sired, Suile Denver, CO 80210 (303) 758 - 8109 Want Ads are (or tailing FRUIT! X mmm. BYBBtrr i ft iii ,ifft ffii iHk eta ig teleport COR P. !M)7 Tfm tuXvport wort from a port Hr a U'rmrinl All aquipmant Al etwmert hot been (Am the printer to Software avaioMt) UVLJXiUi U UVLJuuWiilU 15.5(X). The interest rate on our Money Market account with a $I(),(XX) minimum. 14.750) with a $ .(XX) minimum. accounts yield 15.026 (14.5 (X) rate), $1(),(XX) minimum, and 14.490 yield (I4.(XX) rate), $1,000 minimum. 9 day accounts yield 13.703 (13.050) rate), $1,000 minimum. We guiirantec these rates through Tuesday, August 3, 1982. All Overland Thrift accounts are pmtected up to $I5,(XX) by tlx: Industrial Loan Guaranty Corporation of Utah which is not an instrumcntalilty of the State of Utah or of tlie Federal Givcmment. 1 -- availabla batwatn Aug. 1, and Nov. 1, 1082. W4 ($2, (KM), (MX) inmimimi) BEVERLY HILLS MORTGAGE Teletype 300 LPM Printer TTY-4- 0 With Iroixisi'il and Kxisling ALWAYS QUALITY AT LOW, LOW PRICtS i Los Angeles Times When President Reagan, in response to the Polish suppression of the Sol- idarity trade union, decided to retaliate early this year lay tightening the screws on Soviet efforts to build a gas pipeline to Europe, the pain was felt in Peoria, 111. by the worldwide-economiAlready hard-hi- t recession, Caterpillar Trac tor Co., by far the biggest construction equipment firm in the world, lost a $90 million order for bulldozers as a result of Reagans decision. The action opened the door for Japans Komatsu, Cats largest rival, to fill the void by,,, g earthmover building a new to meet the Russians needs. Now that the United States and ' Europe are nearing a showdown over the perennial issue of steel imports, the negotiations are being watched nerv- ously by companies that make com gluten feed, an obscure byproduct of the production of com sweeteners and gasohol. U.S. exports of com gluten to the Common Market have tripled since 1974, and some European officials have raised the prospect of replying to U.S. . tariff penalties against subsidized European steel by imposing unrelated duties on the cheap animal fodder. These examples point out the growing danger of an economic war among the worlds superpowers. And as the U.S. government increasingly turns to economic sanctions in its foreign policy, critics warn that the use of trade weapons can easily backfire. The situation is quite alarming, says C. Fred Bergsten, a former assistant secretary of the treasury for international affairs and now head of the new Institute for International If were Economics in Washington. not careful, the U.S. could end up trade war (against fighting a two-froJapan and Europe) in which everybody would end up losing. On the other side of the issue, though, workers and firms that suffer from foreign competition argue that the U.S. economy is damaged by unfair trade practices or cheaper imports and that the only way to survive is by adopting similar strategies to protect the nations vulnerable industries. APPROX. M A proposal Other related and compatible eqc pment: PERMANENT LOANS WE DO GLAZING i Utah became a national battleground market funds, with the issuers namely the securities indusdefending the funds as already try being adequately controlled by securities law. The securities industry won the day. Senate Bill 134 was passed without granting the commissioner authority to assert jurisdiction over the funds. on the money pill. 128K Core Memory STRENGTH PLATE, THERMO PANE AND OTHER " Previously, institutional practices has served as identification. In other words, Grove Finance, a thrift company in name and without authority to take deposits, had, in fact, been taking deposits by issuing debentures. Restraining Action Under the new law, the commissioner would have quickly asked for restraining action. But more than anything, it was the short section dealing with money market funds that raised the most fire and obssmoke, and unfortunately cured much of the purpose of the bill. gamble. In their final bargaining, congressional conferees could conceivably throw out the holding-perio-d plum and leave in the yA in SINGLE-DOUBL- E - com- BigTradeWars Could Strain Some Friendly Foreign Ties Represents a Gamble would change the rules covering taxes. It would shorten from one year to six months the holding period required before an investment is considered long-terfor tax purposes. Short-tercapital gains count as ordinary income on tax returns, and therefore may be taxed at rates of up to 50 percent. The maximum rate on long-tercapital gains is 20 percent. More Frequent Trading A shorter capital gains holding period would presumably encourage more frequent trading by investors, and a concomitant increase in com SIZES. 855-405- called "finance sometimes panies. As most observers see it, the SIAs position on the tax bill represents a capital-gain- s STOCK AND NEARLY 400 So. 800 W. The New York stock Exchange composite index dropped 2.29 to 61.51, and the American Stock Exchange market value index was down 7.83 at 248.99. Big Board volume averaged 46.45 million shares a day, against 56.40 million the week before. withholding at the source in return f n- the inclusion of another provision in the bill that The Salt Lake City Airport Authority is seeking an interested and qualified ski rental and sales firm to equip and operate a ski equipment concession at Salt Lake City International Airport. In addition to the rental of ski equipment, this concession will include the limited sale of ski equipment and ski related accessories. The selected concessionaire will be required to provide shops for use by the general LAW OMDUATIt QUAUFY CA AAA (V $ Court. U S court ptu$ SuO'pm Court y $ Court m CA AGO MOV CotOrru rtSOfflCr "Of 1 ALL 808.60. a forbidden practice. However, when he attempted to assert his authority over Grove, Mr. Borthick found nothing in the law to grant him authority. Grove ended up in Federal Bankruptcy court. There was another urgency. The swelling money market funds being offered by the securities and insurance industries. To Utahs financial institutions (particularly the banks), the use of checks by the money market funds came perilously dose to a banking a practice, they contended, practice that should be regulated as a banking practice. Senate Bill Drafted So was drafted Senate Bill 134, aimed at not only remedying the blur of identify of institutions and practices, but expanding the intercessionary authority of the commissioner of financial institutions. Salt Lake attorney William Gibbs, who was an architect of the bill, said the philosophy of the bill was to to identify institutions by definition of practices. If it quacked and waddled like a duck, then it is a duck. Basically, there are five kinds of financial institutions in the state: the commercial banks, the savings and loans, the credit unions, the industrial loan and thrift companies and the industrial loan companies. The last are B-1- 7, NOTICE TMftU WE HAVE LARGE Now, however, it has been approved by the Senate, and is being given a good chance of enactment. Lesson No. 1 Lesson No. 1: In Washington, never confuse the unthinkable with the impossible, a newsletter of the Independent Bankers Association ruefully observed. Notable by its absence from the ranks of those opposing the bill has been the Securities Industry Association, a major Wall Street trade group. The SIA agreed not to fight Institutions determined that the Groves issue of debentures was in fact the accepting of depositor money The bill, in effect for a full year, i9 test with the state take over Murray First Thrift Sc Loan. That action took place quickly on July 19 on orders of Mrs. Elaine Weis, new commissioner of financial institutions. Mrs. Weis and deputies took the action, saying that MFT was in en- dangered financial circumstances. Time will tell whether the action was Column J, See Page now getting its first major in a severe sign SERVICE GLASS missions for their brokers. A boost of that sort would be especially welcome on Wall Street about now, after the bear market of the last year and a half. In the past week, the Dow Jones average of 30 industrials fell 21.97 to clear. NEW YORK From Wall Streets point of view, there is both bane and blessing in the tax bill now pending in Congress. The measure, scheduled to be taken up starting Tuesday by a ( signs ((recoveryseeandfew many people, also made their objections By Chet Currier AP Business Writer mid-1980- mid-1970- happens to be operating out of a building long ago occupied by a bank. with equally not banks in the traditional sense, but rather more like savings and loans. Seeking Better Code s, In the Utahs financial institutions spurred by then commissioner M. D. Borthick moved to bring the Utah financial institutions code up to date. With origins to 1911, it had worked s, well enough. But by the with federal deregulation on the horizon, and record high and volatile interest rates beginning to wrack the economy, the law had to be modernized. The failure of the Grove Finance Co., Pleasant Grove, triggered another urgency. The Department of Financial Call on together or separately mentenenca agreement soce ptrehaaed (208) L O 356-366- 6 Ask for Floyd Roundy A. 235 South Main,. Salt Lake City. 80 South Main, Roosevelt. 322-533- 722-248- OVFKI.AND THRIKr IS A SIMSIDIAHY f N 6. 2. OS AMERICAN SAVIN! A A MIAN 17 |
