Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1910-12-12
WHY IS MONEY so HIGH2

Money is bringing d higher rate OF
interest just now than it has IN many
years Banks can loan at per cent
on personal security more than they
can get to loan. Real estate mortgages
in some cases are made at per cent
with q commission to the fellow who
finds the money and vet the banks have
had very prosperous year with fewer
failures than IN any similar period or
the past. What is the cause of it all,
anyway?
Too much business and no elasticity
to the currency. That is all. 1t is go
ing to get better soon. Money is go
ing to be easier after Jan, I; every
banker believes that and when every
banker believes thing it is sure 70
come to pass 80 dependent is our imam
cial system upon the faith of our bank
trustees. III the most of the country
big crop was raised and il is moving
to market BY January and February
the proceeds VIII have begun to circu-
late: debts will have been liquidatea
and by spring the banks will be ready
to take on some more business. Money
will not be 50 high next summer.
Congress. in the meantime. IS going
to wrestle with the currency problem.
The central bank scheme will be pro-
posed and opposed and we may or may
not get legislation. But whether re-
lief comes at this session or later it
must come sooner or later.
When business men. manufacturers
and jobbers. are confronted with an
unusual demand for their goods, when
their season Of deliveries is very active
they resort to loans al the banks 10
carry on their business. They issue
promissory notes for sixty days or
ninety days or on demand 10 tide them
over until they can collect from their
customers for the unusual volume of
goods sent out. But a bank. when il
faces an unusually active demand for
its goods must either keep on hand in
the dull season an enormous idle stock
of money or be given some such OPP
portunity as the manufacturer and
jobber has to stretch its credit. Under
our present system our banks are COM
PEELED to do business with no elasticity
to their resources In the dulI season
their money piles up in their warehouse
vaults. is sent To the central banks and
from there TO New York where it is
loaned TO spectators in order to keep
it busy. Then when 1t Is needed 10
meet the seasonable demand Of trade
it has actually left the warehouse and
is not available
What is needed IS some such system
as the Scotch or Canadian system
whereby a. certain percentage of a
banks actual resources can be put into
circulation as bank note currency based
upon the general assets Of the bank
without an equivalent Of some other
kind Of money being tied up as it's COL
lateral In this way could our banks
stretch their credit and float their own
paper to meet the excessive demands
of trade in the active seasons. What is
scientific and good business for the
manufacturer and iobber, should be
made good business for the banker This
system works we'll where it is used ana
should be made available in our own
country. 1t does not require a central
bank to provide elastic currency nor
does 1t necessarily follow that interest
rates will go lower. High interest
causes business men to go slower and
at intervals this is not an unusual hard
ship.