El Paso herald. (El Paso, Tex.) 1901-1931, 1911-02-03

Cornell Professor Figures
Out Cause and Time For
Financial Flurries.
AUTUMN ALSO
HARD FOR CASH

Washington, D. c.. Feb. Mooney
panies in the United States are most
likely to occur during the stringent
money markets of the ''spring revival.
or the crOp-mOving season In the fail
This IS one Of the conclusions drawn
from an Investigation by Edwin Waiter
Kemmerer, professor of economics and
finance at Cornell university
Prof KeFnmerer does not mean TO de-
clare that the seasonal stTingeDcies are
the causes of the panics, but that the
weakest links in the seasonal chain, and
that in periods Of extraordinary tension
the chain breaks at those Inks
Statistics OF value to the student OF
monetary problems are made available
in a volume written by Prof KemmereT,
lust published bY the National None
tarv commission, entitled, Seasonal
variations in the relative demand Tor
money and capital In the United States
It is a statistical study, IN which Prof.
Kemmerer has gone beyond the range OF
any previous investigation made IN that
important field. and on the basis OF
statistical evidence establishes many
facts hitherto obscure.
Professor Kemmerer considers in turn
the changes IN the demand for mOneyed
capital in New York, Chicago, st. LOuls,
New Orleans. and San Francisco. As the
best available criteria OF this demand he
has selected interest rates and the ratios
OF bank reserves to deposits from 1890
20 1908 A study Of the data for New
York CITY leads the author to the con-
ciusiOn that there are five periods IN
New YOrk's money market.
First. throughout January there Is
rapid decline in the relative demand for
money. making the last part OF January
and the fore part of February time OF
verv cheaD money. This leasing ND,
professor Kemmerer states. is due to the
fact that the erop-nOVing demand Tor
money IN the west and south has spent
its force. The cash IS flowing back TO
New York Civ. Among other causes be
mentions the natural reaction after the
heavy strain on the money market IN
cideut TO January / settlements.
The author puts the beginning OF the
second period az about the middle OF
February. the relative demand Tor money
advancing rapidly to a high level and
maintaining it through the fore part or
April The cause of this upward move
ment he finds in the encOTa cement 70
investment given by the low interest
rates and the high reserves OF the former
period a second reason IS 20 DE FOUND
in the increase in certain lines OF trade
ACTIVITY which normally takes place at
about this time of the year The Great
lakes. the Mississippi river, and other
inland waterways are opened to traffic
during this period. Railroad traffic -
released from the incubus of cold weather
and snow
The third important seasonal move
ment. according 10 professor kemmerer,
is a rapid decline from about the middle
of April, ending with a very weak money
market in June and July. These are the
hot months of the summer, comprising
the vacation period and the period be-
fore the great crop movements OF the
fall.
The fourth period the author dates
from the first week in August, when
cali rates begin their upward movement
and when bank reserves, both IN amount
and in percentage 70 deposits, begin their
decline The money market continues
to tighten until about the first OF OetO-
Der. The principal cause Of the increas-
ing demand for mOneyed capital during
this period is the call made upon the
New York Citv banks by banks IN the
west and south for cash needed for
crop-mOving purposes"
'SThe last seasonal period IN the New
York market dates from about the first
week in October to the opening of the
new year During this period the rela-
tive demand for mOneyed capital exhi-
bits many minor fluctuations. but re-
mains a. substantially the high level
reached the fore part of October