The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1903-08-23
FARM LOANS ARE ADVANCING
INDICATIONS THAT THE MONEY
MARKET is TIGHTENING.
Wisconsin Banker Sets Forth Objec-
tions to Asset Currency System
Crop Moving Requirements.


at the annual meeting of the Indiana State
Bankers Association TO be held at South
Bend next month. Capt. Hart. while he
was auditor of state, came in close touch
with State banking conditions, and, having
been banker before he came to Indianap-
oils he has for many years been a close
student of finances and financial conditions
both in connection with Indiana and with
the national government. He. as most of
the speakers at the South Bend convention,
will discuss the currency reform question
The most prominent feature of this ques-
ton is asset currency. Capt. Hart is OPP
posed to this country adopting asset cur
rency and much of his address will be de-
voted to this subject
Senator Beverage will also treat the as
set currency reform question, 1T is ex-
pected. He has been in somewhat close
touch with some of the men in the Senate
who will have much to do with the shaping
Of any currency reform bill that will be
presented to the special session of Con-
gress in November, or at the regular ses-
sion. Senator Beveridge, no doubt, will go
to the bankers meeting with much valuable
information concerning currency reform.
The immediate financial outlook in In
diana is that within two months farm loans
will have advanced to per cent. al over
the State. When the rate of interest on
farm loans advances to 51a or 6 per cent.
that is certain indication that the money
market is in anything but an easy condi-
ton. The Tightening of the money market
in Indiana has not been felt so much in
Indianapolis yet as in the smaller cities and
the country towns. The average rate in
indianapolis at which the banks are putting
out money remains around 51s per cent,
and on the best of paper some loans are
made at per cent. But money is anything
but plentiful In Indianapolis at 5 per cent.
In few weeks the country banks will be-
gin to draw heavily on their deposits in
the Indianapolis banks on account of the
large demand for money with which TO
move the crops. In anticipation of this
increased demand from their country clients
the banks of this city have begun to hus-
band their loan resources. And this con-
dition tends toward higher rates and
tighter money.
The increased demand for money from
the small banks for the moving of crops
does not affect the banks of this city as
much as the banks of Chicago and other
Western cities. but interest rates are
boosted" all over the country In the fall,
usually on account of so much money be-
ing used for crop moving And when the
financial situation of the whole country is
affected. of course the change Is felt here
in some degree.
In some of the countyseat towns the
banks are already getting per cent. for
time loans. And cases have been reported
within the last two weeks where country
banks have got per pei cent. for time loans.
haps the average rate for time loans re-
ceived by the banks all over the State.
Eight per cent. is as high as rates are likely
even if the money market gets good deal
tighter than at present.
xxx
''Six per cent. farm loans is a condition
that will prevail In Indiana before long,
think" says Charles N. Williams, the East
Market-street banker and real-estate dealer.
1.-THE local money market Is much tighter
than it was a few months ago. and every
indication points to higher rates within a
month or two. / know of trust companies
that had thousands of dollars they wanted
to put out at rates considerably lower than
5 per cent not many months ago. And there
was not very large demand for money
at those low rates. But let anyone start out
now to negotiate a loan and he will find
that no one Is very anxious to put money
out at less than per cent. There Is a de-
mand for all the money in the loan market
at good stiff rates, and from all indica-
tons the money market in Indiana has
not reached the high point yet. The aver
age farm loan rate over the State will be
6 per cent. before long, II i am not badly
mistaken OF course country banks in some
parts Of the State are getting more than 6
per cent. now on good paper, but this is
not the average rate / think the average
farm loan rate of interest now Is about
5 or 51s per cent. The money market in the
East is so tight now that 1t is very difficult
for a Western bank or trust company to
get a large loan from any of the big New
York banks or trust companies. / was in
New York recently and looked over the
situation pretty carefully. All the money
In the East seems TO be needed right in
New York and they don't want to send
much out West
"A Waukesha, Wis, national banker is
opposed to this countrys adopting the
asset currency system because. he says,
the asset currency is in operation In Canada
and the volume Of business Of that coun-
try is much smaller than the volume of
business in the United States" said the
president of one of the local national banks.
The Waukesha banker says it would not
be wise to adopt asset currency in the
United States because the business OF
Canada is smaller than that done in the
United States. The man simply hasn't taken
smaller country than the United States and
that the asset currency system had had
nothing to do with the fact that the vol
ume of Canadas business doesn't approach
that of the United States. The fact Is that
the currency system of Canada Is much
better than that in in this country.
Under the operation of the asset currency
and branch banking system in Canada the
rural communities there have much better
banking facilities than do the small cities
and towns of this country. II we had a
branch bank in Rochester. for example
where, 1 am told, the banks are getting
and s per cent. for time money, that
town would have the advantage of almost
as good money conditions as those existing
in Indianapolis. If we had a branch there
we probably would equalize our interest
rates and make them per cent. both here
and at Rochester. That is one argument in
| favor of branch banking-that the country
towns have the advantage of the same
banking facilities enjoyed by the cities.
"One thing that is in the way of this cur
rency reform agitations making as much
! Roadway as IL should is the natural preju-
| dice among banking and financial interests
| against changing a currency system that il
| safe and absolutely solid. No one doubts
| that our currency system is sound and that
| il is perfectly safe. But safeness and
| soundness are not all that is required In
i a currency system. This. of course, is the
| first and most important feature OF the
question. But the United States needs a
| currency system which would be more elias
| tic. And We could have a currency system