AMERICAN BANKS

Southland Times, Issue 22192, 7 December 1933, Page 7

AMERICAN BANKS

EASING OF CREDIT STRONGER CAPITAL STRUCTURE NEW PREFERRED STOCK (United Press Assn—Telegraph Copyright.) (Rec. 7.40 p.m.) New York, December 5. The Roosevelt Administration’s ampaign to strengthen the banks’ capital structure through the issuance of new preferred stock gained a notable victory to-day when it was announced that the National City Bank, the second largest in the nation, would issue 50,000,000 dollars of such securities. All of the amount not subscribed by common stock holders would be purchased by the Reconstruction Finance Corporation. At the same time the bank directors recommended that, the institution s capital stock be reduced from 124,000.000 dollars to 77,000,000 by reducing the par value of the common stock from 20 to 12.50 dollars a share. Forty-six million dollars will thus be “released” and used in writing down or off depreciated assets.

In addition to the National City Bank the Reconstruction Finance Corporation has authorized the purchase cf the preferred stock of eleven other New York banks, ranging from 250,090 dollars to 20,000,000 dollars and aggregating 43,700,000 dollars, making a total of 93,700,000 dollars the corporation is prepared to pump into the local banking structure in an effort to case credit.