The Birmingham age-herald., 1913-08-13
Great Chicago Financier
Thinks Apprehension Is
Entirely Unnecessary
WILL NOT CALL ON
NEW YORK MARKET
OF Course, Funds Will Be Withdrawn
From New York Banks, But
This Is Money De-
posted There
BY HOLLAND.

by HOLLAND.
New York. August 12.-(Special) )-George
M. Reynolds president of the Continental
and Commercial National bank of Chi
cago the greatest bank west of the Alle-
ghanies, and among the greatest of the
worlds banking institutions, is believed
by bankers in this city to owe much
of his success to his constant and care
full study of agricultural and Industrial
conditions in the west and also to his
thorough belief in the practice of the
principle of cooperation not only be-
tween his bank and the people, but also
between his bank and other banks.
Mr. Reynolds would have been Secre-
tary of the Treasury in the administration
of President Taft had he been willing
to accept the Presidents offer of the
place. He declined because he believed
that his greatest opportunity lay in fos-
tering industrial and agricultural con-
ditions and in building up great bank
ing institution in the west. He has been
president of the American Bankers as
sociation and was in ah advisory capacity
in certain lines for the national none
tary commission. Some of his addresses
have become traditional as profoundly
able presentations of banking and cur
rency conditions and of the relation of
the American public to the banks
President Reynolds was quoted a day
or two ago as having said that in his
of critical and apprehensive kind upon
the relations of the banks to the Gus
tomary annual financing of the crops. In
his opinion, for instance, the banks of
the west have abundant funds to lend
with which to take care of the needs of
the farmers. The implication in this
statement is that the banks in those
sections of the country where the chief
grain crops are harvested are with their
own facilities fully able to take care of
the farmers needs. They will not be
compelled. therefore, to approach the New
York money market seeking loans with
which they can replenish their own money
supplies.
New York Loans
But as there is sure to be an approach
TO the New York money markets for
loans the proceeds of which are intend
ed for crop moving purposes it is rea-
sonable to be inferred from President
Reynolds s statement that those who seek
these loans viii represent the chief har-
vests of the south and of the southwest
st. Louis for years has been look ed
upon as the chief financial center upon
which the planters of the lower Mis-
sissippi valley may rely for financial
accommodations while their crops arc
being harvested. Baltimore also fur
nishes considerable financial assistance
to the planters of the southern AT
lantic coast.
No doubt funds in large amounts will
be withdrawn from the New York
banks while harvesting is in progress
But these funds are for the most part
money lent to. or in other words de-
posted in, New York banks by banks
in other parts of the country in the
spring and early summer The with
drawal of these funds, therefore, repre-
sents no more than the checking of i.
out. 1t is not New York money. 1t
is western and southern money.
The Resources of the West
President Reynolds is of such high
authority on this subject that his state-
ment will be accepted without oues-
ton. 1t serves to confirm the pre-
diction made about 10 years ago by
some of the leading authorities In the
New York Clearing House association.
fhese men ventured the prediction that
II railroad facilities were increased
each year relatively as greatly as they
were increased after che reorganiza-
tion and rehabilitation of the railroads
of the country were completed in tho
early nineties, and if agriculture pro
gressed in the west as rapidly as IT
did between 1850 and 1895, then the
a Al
far distant when so great would be the
margin for the farmers between the
cost of planting and harvesting and the
money returns which they received
from their crops that perhaps in 10
years 1T would be possible for the farm
ers in the grain growing. states safely
to rely upon their own banks for funds
in the harvest season.
one of the clearing house authorities.
the late Frederick ID. Tappen, was Will
ing that this prediction made by him
in 1899 should be published Mr. Tan
pen was greatly amused by the crit
ical comments which the publication o.
this opinion caused. Even New York
bankers looked upon the forecast as
absurd although all of them believed
that the time would come when the
prosperity of the various sections of the
country would be so great that each
section would be able with its own
money resources to take care of its
farmers. Fourteen years have passed
since Mr. Tappens prediction was pub
lished and now President Reynolds of
Chicago asserts in effect that the nre
diction of 1899 Is now justified by the
facts.
The Movement of Exchange
After the crops are harvested and wien
they are on the way to their respective
markets, then the banks of the great
financial eenters will be expected to facii-
itate the movement of exchange.
In 1907, at the very time the currency
panics storm burst upon us in all its fury.
the movement of cotton from the fields TO
Liverpool had just begun The brokers
who customarily were employed to mar
ket foreign exchange drawn against ship
me nts of cotton were for two or three DAYS
in great alarm, as were many of the
planters of the south. But it was speedily
discovered that the banks of New York
would buy this foreign exchange and in
one case $S.O00.000 worth of cotton ex-
charge was bought by a single New York
city bank. These cotton bills were avail
able to secure instant importation of gold
and the purchase of them Mas possible
because the Clearing House association
had decided to issue certificates. When
Mr. Morgan realized that the time was
near at hand when he was to pay so, 600 900
in gold in London to complete the pur-
chase of steamship lines which were abb
sorbed in the International Mercantile Ma
rine company. the cotton planters and
tI,, Of