The Washington herald., 1912-10-12
A TEN Bn11on Do1LAa JOB.

> tCbpndsAt, ma hg O. n. Keys. New Y0t)
According to all accounts. the crops |
OF the United States this year win net
the farmers the biggest figure ever re-
cefved. Money values Of the total crops |
ON the farm win probably be close to. |
II not over. ten billion dollara- This
means that In all probability the farmers |
Of the Limited States will have some |
where between 60o.0oo. 900 and 81, 1,ooo.ooo.0oo |
dollars more actual income In 1Sl3 than
they ever had before.
This seems an enormous amount In
the aGgresate. but It II not 20 much
when It is divided amonR &0o00o farm
ers. Actually II means that the AVERAGE
ably have about 800 more to spend next
year than he did in 1910 or 1911.
At the present moment the phase Of
this wonderful crop situation that II !
most interesting u the question how II
ID going to be taken out OF the hands
Of the farmers and put into the hands
Of the consumers. In all probability Q
quarter Of It will stay on the farms and
viii be consumed. and the farmers will
collect in the aggregate about $500. 900 900
by the sale of what they do not con-
sumo.
II takes all year long to carry on
this process in full because q great deal
Of the production goes on month by
month: some Of II reaches its greatest
volume In the spring. some In the sum-
mer. some In the autumn. and some In
the winter. and q great deal Of It 10
perishable products that are produced
and finally consumed within the space
Of q few days.
The fact, however. that the biggest
staples. cotton, wheat, corn. oats. and
all the other cereals. come to maturity
and are harvested in the brief space Of
two or three months all over the coun-
try IL the basis for the biggest financial
job that has to be performed by our
banking machinery every year.
The banks Of the country have to take
this production Of cereals. cotton. pota-
toes. &c. out Of the hands OF the farm
ers and give the farmers cash. and then
carry these products for the people who
store them awaiting ultimate consump-
ton and who put them into various
processes Of manufacture and will finally
sell them to the public in the form Of
food and clothing for daily consumption
and use.
That Is the reason why every year
the financial world looks for rise in
the money rates In September and Oc-
tober and then expects money rata to
come down again toward the end Of the
year. Money has lain pretty idle all
through the summer in the banks of the
East and the Middle West. and has
been in various incidental ways at low
! rates of interest. In this past year there
has been 30 little used everv day that
any one who wanted to borrow II on
demand in Wall Street could do SO at
= J. and I per cent as a maximum. pro-
vided the security was good enough.
Now. quite suddenly. many millions Of
dollars Of cash are called out Of the
markets Of the East and Middle West
to 60 into the little market towns OF tho
West. where production and marketing
are going on. Every little country bank
in the agricultural region calls hack
money that 1t has loaned to the bigger
banks in the city and puts that money
/ to work moving the crops. In q bad
| crop year their own money Is about
| enough to finance this movement. but In
| a year like this one. where the crops
are enormous and prices are high. the
Western banks are apt to become bor-
| rowers of money In the East. In addition
| to calling back their own funds
good many people think that there
il q deep and natural antagcnism be-
| tween the Western producer and the
Eastern banker. who IL In the nature OF
things only a middleman and not a pro-
ducer. Just to look the facts Of to-day
| in the face ought to remove that i'm
preston for good. For II the Eastern
banking machinery were not to be al
the disposal Of the farmers in getting rid
Of the products OF the soil. the farmer
would have a very bad time indeed in
the carrying out OF his marketing. As a
| matter Of fact. close study Of the pres
| ent situation shows that the banks OF
| the East have called a halt to specula-
| ton in Wall Street and extensive trad
| ing In bonds or stocks Of any kind. and
even to commercial borrowing by the
merchants and industrialists of the City
Of New York. in order to see to It tina,
the farming community Of the West get.
back not only its own money for its
| own purposes. but whatever additional
/ money may be needed.
| The way the Eastern and Middle West
| ern banks accomplish this result Is very
simple in its operation. though some
+, times very complex In its result. 1
has been shown that in normal time
/ when there Is no demand from tn,
West. q great deal Of money Is loaned
in Wall Street. and in all the other mar.
kets Of the East and Middle West. the
people were carrying on operations in
stock. In bonds. In commercial paper
and In other forms Of investment. jas,
a. soon a. the banks begin to be sure
that there In going to be q big Job tc
be done In the West in the fall they Be.
| 81n 10 2oV180 the0o OOrrOWefS tnot per
haps they had better ix It up 50 that
they can get along with q little less
money In the fall. Speculative opera.
tions In particular get the first note OF
warning. sometimes as early as June and
July. That II the reason why. a. In
this year. . very hourishing hooking
boom In speculative stocks in Wal
Street was allowed to die a natura
death in the early summer, or at least te
be put into cold storage to wait unit
after the crops had been moved. 1t !,
not only upon speculative operations
however. that the ban is placed. Biz
bond houses that have been engaged ir
financing and building railroads. streei
railways. industrials. &C. are among thu
best borrowers Of funds on deposit IL
the bank. They. too. get notice that II
all probability the rat . on their loan.
will have to 60 up considerably In tn
fau and that u the present promises ar,
fu1nlied by the fields Of the West, thu
| rates may be very high. They are told
Therefore, that IL there IL anything <ha
they can put OF until after the end o.
October. 1t would not be bad idea b
put V OF.
I MERCHANTS and manufacturers wh,
were steady customers Of the banks m
not usually disturbed, % far a. thel
current loans for business are concerned
II. however. they come to the bank d
tell about some new proposition tha
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