The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1902-11-12
RIDGFLY SOUNDS WARNING


: Inc IILollSy III CIRCULATION IldS DSC4A
increased, and, although the amount
held by the banks has increased $751;
100000 since 1892, there is not enough to
| handle the additional business. Not
only is there more of every kind of
material to handle, but prices are high
I er, requiring much larger sums of mon
ey. Transactions which ordinarily could
be conducted with comparative ease are
now matters of much anxiety. The OPP
erations of the treasury department in
collecting money for taxes and the dis
position of the funds of the govern
ment; the money required for moving
the crops or any large payments of
money for interest, dividends, or syn
dictate payments of unusual size, pro-
duce much more disturbance than they
did before the present condition was
reached.
/ SOUND BASIS OF PRESENT PROS
PERITY.
Mr.. Ridgeley said that it must be
conceded that the improvement in bus
mess and general revival of prosperity
have been based on the soundest fun
damental conditions. He went on to
show how agricultural industrial and
commercial conditions had justified and
produced it all. Farmers he said. are
now gathering and beginning to sell the
largest and most valuable crop they
have ever produced. Wholesale and re-
tail business is good in all parts of the
country, and the universal report is
that collections were never easier to
make. He added:
In spite of all this the banking and
financial situation is looked upon with
considerable apprehension. We cannot
disguise the fact that with reserves
running down not only in the reserve
cities, but in all the banks of the coun-
try, the situation is serious and re-
quires close attention and careful ham
ding. Now is the time for caution and
care in bank management. 1t is in
times such as we have been having for
several years that banks get into trou-
Bile. What becomes later bad line Of
credits is apt to be made in prosperous
years, not when times are dull and
business bad.
There have been some changes in
banking conditions which greatly af-
feet the present situation. You are ia
miliar with the movement of the last
few years, resulting in the consolida-
ton of great numbers of industrial cor
porations into the vast combinations
which we have come to call trusts
All over the country concern after con-
Germ, hundreds and perhaps thousands
of them, have been combined in this
way. They have been capitalized for
very large sums, the total running into
billions of dollars. A large part of
these securities more, l think, than has
generally been supposed, have been re-
tanned by the various vendors of the
constituent companies, but many hun
bred millions have been sold in the
New York market and are still held
there, some of them carried by the
banks as collaterals for loans; others
paid for and put away New York has
not only had to furnish the money to
buy out large part of all the indus
tries of the country, but it is called on
now to furnish the money they have to
borrow The financing of the compa-
MES is mainly done in New York or
the other large cities. Instead of a
vast number of concerns getting the
money they require by discounting GUS
toners paper or giving their own notes
to their local banks, we find that the
trusts mainly keep the small amount
of customers paper they receive and
borrow their money from the large
banks. The largest and strongest do
this on their own single name paper,
some of them borrow upon collateral
and others make so-called commercial
paper or notes to be sold by note brok-
ers to banks all over the country. In
many lines the credits formerly given
have been shortened in time. Instead
of the terms of sale of many articles
being as formerly sixty days, ninety
days or four months paper, they have
been reduced to thirty days or less on
open account settled in cash instead of
by paper. The result of these move
ments has been to send a large amount
of money out of the cities for the pur-
chase of the plants, and to deprive the
country banks, into which much of this
money went, Of their best borrowing
customers. We should remem-
Der, however, that all this is not the
cause of our great prosperity nor its
chief result, but merely an unavoida-
BILE, if not necessary, feature of it. It
is not speculation which has advanced
prices so much as it is advanced prices
which have caused speculation.
Here Mr.. Ridgely spoke of the in
creased wealth of the west and then
said:
Ordinarily, the operations of our gov.
eminent finances add to our difficulties
rather than help the situation, and the
best that the secretary of the treasury
can do when called on to help the situa.
ton is merely to undo some of the
harm which has been done by the oper.
alton of our laws for the collection OF
the revenue and the boarding of money
in our treasury"
It is unfortunate that the weakest
point of our banking system is in its
provisions for dealing with such stu
alton as seems before us to-day Moth
ing could better illustrate the necessity
for more elastic banking currency
than the demand for it at the present
time. Our banks have been and are be-
ing called upon to furnish the currency
and credits necessary to move enor-
nous crops, probably the largest volume
and value the country has ever pro-
duced.
believe in branch banking. Theo.
retically it is the best system, as it is
more economical. more efficient, will