The Portland daily press., 1882-10-24
Money and the Crops

The extreme stringency of the New York
loan market, which Secretary Folger's ex-
traordinary call for bonds, to be redeemed
at the rate of $5,000,0OO per month, without
rebateof three months interest was intend
ed to cure, has not returned since the rem
edial application was made; but the scarcity
Of currency, both in New York and the in
terror markets, is greater and more prolong-
ed than is common at this season of the
year. Eight per cent is not far from the
average call loan rate in Wall street, and
country banks carefully confne their dis
counts to regular customers, who may not
be refused A transitory stringency is COM
patch of currency from the monetary CEN
tiers to the agricultural districts, to start the
movement of grain to the market, and its
return through the regular commercial chan
nels to its source. This is the regular thing
and banks and their customers are generally
prepared for it. This year, however, the
period of stringency is prolonged by the tar
diness of the crop movement. A good many
causes conspired to make crops slow in seek
ing market. Some of them are local, like
the present bad weather in the Northwest.
Larger than all the local causes, however, is
a general indlsposition on the part of farm
ers to accept current prices. This influence
is SO powerful that, during all the fine
weather that preceded the present storms,
though time enough had elapsed for the har-
nd inn ~ NH fto NJ; &c
were so meager as to be the subject of fire.
quent comment, even before the financial eff
feet of the indisposition to sell became APP
parent. Present prices are not satisfactory,
and farmers are generally disposed to hold
back their grain. The general prosperity of
them, as rule, to crafty this inclination.
The result of this is that the currency sent
out to move the crops stays out instead of
returning to the city banks. This makes
money scarce, interest high, speculation in
active and general trade sluggish. There is
NO guessing how long this condition of things
will last. 1t will continue until the move
ment of the crops to market sets free the
money now in The hands of elevator men
and local dealers i flow back through the
hands of local merchandise dealers, jobbers
and manufacturers to the Eastern banks.
This will happen when the views of farmers
and the market price of wheat draw nearer
together. This is hardly likely to happen
through rise in price, in view of the Amer
lean surplus, large enough even when allow
ance is made for all exaggei ations, and the
moderate foreign demand. 1t will probably
happen when the farmer becomes Convinced
that prices cannot rise much higher, or
when his needs overcome his hope of profit
to be made by waiting. Either of these pro-
cesses will necessarily be slow. The coun-
try has been taught for the last three or four
years to look for large and certain Euro
pean demand for grain, and consequent high
prices. The lesson will not be easy to I'M
learn. The change in the conditions of the
foreign trade was obscured st year by the
partial crop failure in America and the con-
sequent reduction of our surplus. This year
small foreign demand comedies with a
large home surplus, and the influence upon
prices is powerful and constant.