The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1902-12-01
he SAYS co SLOW
II. ID. Lee Sounds q Note of
Warning.
Thinks That End of. Prosperity
Is Near.
ARE IN THE OLD RUTS
Time Has Nearly Come for &
Reaction.
Money Is Already Scarcer in
East Than Here.

H. D. Lee of Salina. one of the leading
business men, not only of Kansas but
of the west, sounds a note of warning
concerning the present prosperity in
Kansas. He does not believe it will
continue.
Mr.. Lees opinion is worthy of CON
slderation, for he is a man of wide ex-
perience and probably has as diversi-
fed business interests of considerable
magnitude as any man in the state He
is president of the H. d. Lee Mercan-
tile company of Salina. of the Farmers
National bank of Salina, of the Lee
Ice & Cold Storage company. and is
just starting wholesale hardware and
paint house with capital of 100000,
all of which do business on a large
scale. Besides this Mr.. Lee has spent
a number of years in New York as
chairman of the National Wholesale
Grocers' association.
Mr.. Lee was in Topeka Saturday on
business and called on Governor Stan
ley. In talking with a newspap per re-
porter about conditions in Kansas he
said:
4 fear there are breakers ahead in
business circles. There is a shortage
of money in the east and interest is now
greater back there than out here 1t
must eventually reach us in the west
and l think the west ought to prepare
for it. l will confess that 1 looked for
it year ago, but was mistaken about
it's coming at that time.
I'VE have had a season of wonderful
prosperity during recent years here in
Kansas, but / fear we are getting into
/ the old ruts and are not prepared for
period of depression. l realize that this
/ isn't the kind of talk you generally
! hear, and that is just the trouble Peo-
pie are not expecting it and preparing
for it.
L thought saw it coming In New
York a year ago, and l wrote to my
/ people in Salina to reduce their stock
We carry a stock of about $500, 900 in our
wholesale grocery business out there,
which is pretty big for an inland town.
Each month the reports I got from Sa-
| lima showed an increase in the stock
and finally L wrote pretty sharp letter
| ordering that the stock be reduced. The
manager in charge wrote back that
hard times might be coming in the east
/ but they hadn't been sighted out here;
that it was a question of getting goods
to supply the demands and not reduc-
ing the stock that was bothering- l will
admit that / was wrong in expecting a
business depression that soon, but 1 see
indications out here now that it is COM
although interest rates are now low
here and money is plentiful, borrowers
will find out before long that those con-
ditions have changed. They will find
that some of their investments have not
+ turned out as well as they expected.
Then when they go to the bank when
holds their notes and want to renew
them the bank will want the money. If
they go to another bank they will find
interest higher and money not as free
as it has been.
Many farmers last winter and spring
bought another piece of land and bor-
| roWed the money for 80 days or six
months with which to pay for it. They
expected to pay their notes out of their
wheat crop. The wheat didn't material
have had ask their banks
to extend their loans. Many banks now
| find themselves with permanent loans
on their hands which they did not eX-
pect They loaned their money only for
a short time and are now having trouble
to get it back The cattle men are max
ing no great amount of money l am
glad that my bank has a lot of stock
1 holders behind it who are lenders of
money instead of borrowers. Some peo-
pie buy bank stock in order to be able
to borrow plenty of money from the
4 bank The stockholders of my bank
make a business of loaning money in
stead of borrowing it. and for that rea-
son I am not alarmed. Otherwise
might be afraid the supply would run
short when there comes a stringency in
the money market in the vest
What is the reason so many new
banks have been started then within the
past few months?" Mr.. Lee was asked.
Its the same old story over again.
You remember during the boom times
| there were great many banks, but the
panic and the hard times thinned them
out In the past two or three years
money has been plenty and lot of new
banks were started. When money gets
short they will have a hard time.
know of one little bank up west of Sa-
lima that was started with a capital of
$5. 900 and almost Immediately its depos-
its ran up to $4,000 Its president was
in TO see me the other day and I asked
him how his bank was doing. He said
his deposits have gone down to $1,000.
Already that bank is beginning to feel
the stringency.
I think we are yet to feel the worst ef-
fects of the shortage in the wheat crop
last summer. AS a rule when we have
a partial wheat failure, other states and
| countries suffer the same way. but this
year there is Eood wheat in the north :
west, in Argentine, and over the world
generally. The farmers who have old
wheat will hold it expecting to get 3,
high price, but 1 don't believe the high
price will come.
"Of course people as a rule are bet
ter prepared for stringency in money
than they were a few years ago, and
those who prepare for a change will get
| through all right. but those who do not
may find themselves in close straits"