The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1903-03-22
'FACNIDUS
PROSPERITY
WeSterner Finds Trouble I'M
minent in Wall Street.
WEST SOUND AS DOLLAR
Bankers Refusing to Loan
Money Hurting East.
WEST SOUND AS DOLLAR

Washington, March 21-Among recent
Western visitors to the East mas been w.
| D. Washburn, jr, of Minneapolis, son of
the former United States Senator, and
| himself well known business man and
! stalwart Republican A summary of his
| observations in New York. as stated TO a
friend here on his way home, is not hope
full
In spite Of a general appearance of
prosperity" said he, the New York fl
| nancial market is nervous and distrustful.
Large firms suddenly disappear with
hardly a moments warning. With any
marked decrease in bank reserves, the
whole line of stocks drops several points,
and call money jumps up 10 or p per cent
Order is then reestabIished by concerted
and gigantic efforts of the banks and the
financial magnates who are now practic-
ally upholding the market 1t may be
noted as factor of great weakness that
the general public has almost entirely
withdrawn from investments in indus
trial stocks.
Some of the conditions leading to this
situation are clearly visible. Large vol
urnes Of money which have heretofore
gone to New York have ceased to flow in
that direction. Western and Southern
banks are holding their balances largely
for the use of their own customers in
legitimate business enterprises, which
have expanded on sound lines. In the
Northwestern States local capital has
been largely withdrawn from local banks
to embark in the great land movement
which is taking place in Minnesota, the
Dakotas, and the Pacific Northwest. Pro-
badly 900 settlers moved from the corn
belt into this region last year; at least
10000 Will change their residence during
the present year. The amount of cash
necessary to maintain this continued agri-
cultural movement in the purchase of
land, equipment and stock is very large.
At a moderate estimate, 800 900, 900 or
$500, 100000 must have been diverted by it
from ordinary commercial channels in
the last two years. Moreover, the banks
in the West have grown reluctant to hold
large balances in the East. For a time
they were attracted by favorable interest
rates, and kept their unemployed capital
market the growing distrust of industrial
collaterals, and the frequently recurring
spectacle of call money at 10 or 20 per cent
in New York, have chilled their ardor
Even the inducement of panic rates will
no longer tempt them to risk large de-
posits where such abnormal conditions
prevail. They have therefore gradually
cut their balances down to a minimum
figure. The large balances will probably
never return to New York, as the West
can now utilize its entire capital at home
with better security and higher rates.
Similar reasoning would apply 10 other
parts of the United States, so il is ques-
tionable whether the operations of Wall
Street can ever hereafter be permanently
sustained by capital withdrawn from legi-
innate industries elsewhere.
THE absorption of money by the United
States Treasury far beyond the needs of
proper expenditure also constantly con-
tracts the circulating medium to the great
injury of business, not only in New York
but in all parts of the United States. The I
defeat of the Aldrlch bill adds TO the gen (
eral distrust. 1t viii now be impossible TO !
provide for an elastic currency, to with |
stand a sudden business crisis. until the
next eongress convenes. In the meantime, !
cash necessary TO transact business con- |
gests in the Treasury vaults. where il is /
to dislodge it except by the pur- :
chase of Government bonds which in 1
turn tends to decrease the circulation of /
national banknotes As the last purchase |
Of Government bonds was largely utilized :.
as the basis of still greater speculative /
in Wall Street, the Treasury
viii hardly resort to such heroic treat
ment again, except in the event Of a ma
tionai financial crisis. The expenditure
IF vast sums IN building enterprises, in
the expansion of traction systems, and.
astly, in extrav7gant living in New York
md other Eastern trade centres. also
tends TO increase the financial stringency.
Besides the surface causes, there are
ieep-seated and radical reasons for the
present 'uusat isfactory state of things.
These involve the tariff and the Trusts
which have developed under it. The pro-
ective tariff was erected by the Republic
AN party FOR the legitimate purpose OF
defending our industries against Euro
oean labor and capital until these indus
ries could hold their own without assis-
auce and with a fair profit against the
outside world. II was expected that this
would render Us independent Of the Euro
1ean markets. and develop a large and
thrifty class Of American workingmen.
'apable Of sustaining q government n