Bank Week

Observed in proper legal form in thousands of U. S. banks last week was that hallowed financial institution, "bank meeting week." The turnout was small. For the first time in eight years the bankers faced their stockholders with the comforting assurance that their greetings would not be returned with loud boos and cat calls. Indeed, many a banker had the long-forgotten pleasure of receiving a rising vote of confidence and appreciation. In serene sessions throughout the land the stockholders nodded approval to 1936 reports, listened respectfully to what the bankers had to say. Operating profits were up a little, security profits up a lot. Recoveries from bad assets continued to mount. Demand for business loans was increasing but interest rates were still discouragingly low. Government bonds were still by far the largest asset item. Commercial banks at the year end held no less than 60% of the total national debt. Over bulging bond portfolios, over record bond prices, the bankers were a little jittery, fearing the inevitable upward turn in interest rates which will end the great est bull bond market in U. S. history (TIME, June 8).

In Manhattan Chairman Walter Frew of Corn Exchange Bank Trust Co., whose statements anyone is supposed to be able to understand, pointed out that his commercial loans now amounted to only $9,000,000, whereas that item used to run as high as $50,000,000. As for return on his money, Banker Frew was averaging only 4.28% on mortgages, 4.12% on loans and discounts, 2.96% on Government bonds, which at the year end comprised more than one-half of all the bank's earning assets.

Accounting for his stewardship of the No. 1 U. S. bank, Chairman Winthrop Aldrich of Chase National pointed out that while 1936 earnings of $17,264,000 showed an increase over the $15,340,000 reported for 1935, a substantial part was derived from stock in the cinema industry. Mr. Aldrich was referring principally to those two heritages from the Wiggin regime, Fox Film and General Theatres Equipment. "Obviously," said conservative Banker Aldrich, "holdings of this kind can not be regarded as normal earning assets for a commercial bank and the income de rived from them, therefore, is in the na ture of special revenue rather than ordinary earnings."

Acutely aware that the U. S. now expects a greater sense of responsibility from its bankers than was manifest in the 19205, the bankers last week were strictly on good behavior. Revealing that his and President Gordon Rentschler's salaries had been boosted from $75,000 to $100,000, Chairman James Handasyd Perkins of Manhattan's National City Bank warned that "it is the duty of banks to do all in their power to avoid the pitfalls which increased prosperity creates." Cried Har vey Dow Gibson to applauding stockholders in his Manufacturers Trust: "As a nation we seem now definitely committed to a program of social legislation which will iron out some of the inequities of our economic order. . . . This is altogether in keeping with the spirit of the times and with the lessons which the Depression taught us."

Notable Chicago banking news was made last fortnight when big Continental Illinois National Bank & Trust Co. cast off the government control which has existed, in theory if not in practice, ever since it sold some $50,000,000 worth of preferred stock to Jesse Jones's RFC in 1933. Subsequently $5,000,000 of this was paid off, and fortnight ago the total was cut to $35,000,000. At the same time a 33 1/3% common stock dividend was declared, pushing the total of common stock to $40,000,000--above the RFC's interest. Continental Illinois' amazing comeback is reflected in last year's record earnings ($21,495,000) and in the current price of its shares ($140,33 against a Depression low of $18).

At Northern Trust Co.'s meeting a fourth-generation Chicago banker was elevated to the board of his family's bank last week--Solomon Byron Smith, 31, vice president son of President Solomon Albert Smith, a grandson of that bank's founder and a great-grandson of a powder salesman who helped found what was later the cornerstone of big Continental Illinois.

In Boston another and more famed banking scion was promoted in another institution identified with family. Made board chairman of Old Colony Trust Co. was T. (for Thomas) Jefferson Coolidgc, whose lineage is longer than Banker Smith's but whose bank was founded by his father, not grandfather. Since he split with the New Deal, the onetime Under Secretary of the Treasury has been an Old Colony vice president. Banker Coolidge as board chairman succeeded Gordon Abbott, who retired after 43 years in the institution.

A notable Canadian banking retirement last week was the resignation of old Sir John Aird from the presidency of Canadian Bank of Commerce. In his farewell address the dean of Dominion bankers announced: "Prosperity returned to the greater part of Canada in 1936."

This file is automatically generated by a robot program, so reader's discretion is required.