The Salt Lake herald-Republican. [volume] (Salt Lake City, Utah) 1909-1918, 1910-05-28
SCARCITY OF MONEY.

.
SCARCITY OF MONEY.
The Wall Street Journal has emit
ted the annual squeal regarding the
necessity of providing money for the
movement of crops. The Chicago
Evening Post is quoted to show that
western farmers have had the audaci-
ty to withdraw some of their deposits
from the country banks for one pur-
pose or another. The Post article
reads:
This year, both the country banks
and the central reserve banks
miscalculated the volume of
money needed for the settlement
on March l No one realizes the
amount of land that had actually
been transferred or was about to
be transferred
In addition 10 this-and this was one
of the contributing causes 70 tie
Observation-Disclosures banks all
through the west were carrying
large deposit balances to the
credit of farmers. They natur-
ally figured that they were in a
strong position to care for all
requirements But they. over
looked the fact that the farmers
in financing their land TRANSACT
tiors would make heavy lnroacs
On their deposits But this is
exactly what happened. And the
banks and bankers of the Interior
were forced to call upon their
central reserve correspondents
for help.
The Journal believes the action Of
the farmers has left them in po-
sition which could not be readily
liquidated in a crisis" Perhaps there
should be a law against the farmer
Withdrawing his money after the
bank once gets hold of it. 1t would
be his money all right, but he'd al
ways have it coming to him.
Another Chicago authority is quoted
by the New York financial paper as
throwing additional light upon the SIT
uation in the rural communities of
Illinois. This authority is the Chi
cago Banker, which says:
That the demand for funds from
country banks is unprecedented
is beyond question. A leading
banker from Morris, Ill, reports
that there are in use $50 auto
mobiles in his city, costing in
excess of $1,000 each, the money
having gone to Indianapolis,
Cleveland and Detroit In aidi-
ton, farmers have sent in the
past year S100,0 900 to buy lands in
the northwest and Canada, rails
Ing the amount of money taken
out of the normal supply at Nor
ris of s35O,O00. This supply must
be replaced by money drawn
from reserve deposit and loaned
at the financial centers. Multiply
the Morris case Of $3.50, 900 by the
number of all the smaller cities
and you get staggering
amount.
The Journal takes a gloomy view of
the situation and modify remarks
that Wall street knows that it will
be invited to finance the crop-moving
period this year, as in all other years.
There is no justice in such COM
plants. The farmers and business
men Of the west deposit their money
in the country banks, the latter pat
ronize the financial institutions of
nearby cities and in the end the bulk
of the money turns up in New York
The farmer then raises another
crop which he proceeds to sell. One
would naturally think it was up to the
buyers of the wheat, corn, cotton ana
other staples to provide the cash nee
essary to complete the transaction
without using the deposits of the
farmers themselves.
The real truth is that the money,
considerable of it at least, which is
sent to New York by western banks
for reserve fund purposes is loaned
on call to the stock gamblers and
when crop-moving time comes along
there is always a howl that the coun-
try is pinched for ready cash.
New York, being the financial CEN
ter of the country, is naturally ex-
pected to finance the crop-moving
period, regardless of the ups and
downs of the Wall street market or
the needs of the Spectators. Crop
moving is legitimate business and
the prosperity Of the whole country
depends upon the food products
raised by the farmer and his ability
to turn it into cash at good prices.
If New York cannot spare enough
of the western deposits for the pur-
pose, the reserves should be kept in
some other city.