The Evening statesman. [volume] (Walla Walla, Wash.) 1903-1910, 1907-11-18

| NOW we nave Cutie liilo tliS ian -
the year, when the country banks
need their money at home. 1hey
drop out of the market as buyers OF
paper and proceed to collect on what
falls due. They have no interest IN
the borrower and he has no claims on
them, which seems to be an ideal SIT
nation from the bankers standpoint.
But where is the money to come from
to take up the paper?
1T is to be remembered that the
fall of the year is the active season Tor
business in practically all parts of the
country and iii nearly every line OF
business. There is more business TO be
done and more money and credit is
needed in the fall than in other sea-
sons.
when the country banker drops out
of the market as a buyer of CONNER
cial paper, these borrowers fall back
on the city banks, or wherever they
have claims to consideration and beg
to be taken care of. The result is the
tight money market we have in the
centers every fall. and which seems to
grow tighter and more threatening
every year with the expansion of bust
ness.
Matters are only slightly accentu-
ated this year. l want to emphasize
that it is regular phenomenon, due
to natural conditions; nobody in par
| ticular is responsible for it, and it is
idle to expect any reform by the vol
untary action of individuals. Look at
the people who contribute to it. 1t is
useless to preach to business men that
they ought not to borrow so much.
That is an old sermon, not likely to
have any more effect in the future than
it has had in the past. Every man
considers himself the best judge of his
own business, and if his business is
profitable and promising he will bor-
row money to enlarge it rather than
that he could have In the second place
it is useless to warn the country
banker that he creates a dangerous
situation by taking on so much COM
mercial paper in one part of the year
and then shifting his funds rapidly at
another season. He naturally pursues
the policy which his own experience
has shown to be satisfactory for his
own interests, without much regard to
general results. Finally there is no use
expecting the city banker to cure the
evil by any voluntary action on his
part 1t is useless to tell him that he
ought to keep lot of money on which
he is paying interest, idle through the
fore part of the year in order to take
care of these borrowers whom the
country banks drop in the fall. He
can't afford to do that, and the indiv-
ual who did it would be driven out of
business by his competitors. 1t is
useless to tell him to teach these reck-
less borrowers lesson by letting them
go to the wall. He can't afford to let
| them go to the wall. In the first place
it is the duty of the banker to the
community to support legitimate in
dustries and not allow solvent con-
Germs to fail for the want of ready
money if he can supply it. And when
money is tight everywhere and all re-
sources are strained to the limits. and
there is feeling of distrust and alarm
already abroad, it is dangerous to the
whole community, and to bankers
IL #
failures.
This annual situation of tight
money, l repeat, is one that cannot be
cured by giving advice to individuals.
1t is a general situation, due primarily
to the fact that there is more business
to be handled in the fall of the year
than at other seasons If there is to be
any relief from this annual squeeze,
which we now look forward to every
year with apprehension, 1t must be by
recognizing and providing for this de-
mand.
For this reason there is persistent
agitation for some change in our mon
etary system which will give a degree
of elasticity to it. For my part 1 be-
lieve that such reform is needed, and
that the need will become more and
more imperative as the country grows
and as our credits become greater in
volume and, more and more inter-re-
lated and interdependent The effects OF
individual or local weakness are not
: confined to the individual or the To-
cality when conditions are strained
There is a nervousness everywhere a,
such a time that is peculiarly suscep-
tible to alarm, and the influence OF
, every unfortunate development, OF
, every mishap, is cumulative as i,
moves along. AS soon as money is
reported tight, the newspapers begir
) to feature it. gossip turns to it. and
people discuss the possibility or the
probability OF panic. This INCREASING
volume of commercial paper is one OIL
more of the explosive elements in the sit
uatior.. Suppose two or three big houses
whose paper is widely distributed
: should fail, what would the effect or