New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-03-05
MORGAN THEORY DISPUTED
Reversion of Crop Funds to Farmers
Fiction, Says Brooklynite.

Sir. There Is nluCl III Auc '"'' co" 49,
To- the Pujo committee that merits tne APP
ploval expressed I'm YOUR editorial oil en-
iIary IS. but there is one statement III
tie brief concerning the main point al
issue which. although put forward WIN
much show Of authority" Is wholly al
variance with the facts.
The main object Of the Pujo committee
vas IN locate the cause of the concentra-
zion of money at New York ON TINS
point the brief says that the concehl''
ton has been due not 10 the purposes
and activities OF men. but primarily u
the operation OF our antiquated Oahh'hs
system. which automatically compeis III
terror banks 10 concentrate III New III"
CITY hundreds of millions OF reserve
funds and next To economic laws, which
in every country create some one city as
the great financial centre. and when
draws 10 II i'm enormous volume invest
ment funds
adm, that this concentration j. not
due TO the activities or purposes oil
men" but I challenge the statement mat
+, is primarily due 20 the lending OF IN
terror bank reserves This theory OF the
matter was exploited by numerous wiz
nesses before the PuJo committee incIuo-
ing II. T.. Dawson. OF the Morgan hrm IL
forms the basis OF the chief argument that
has been exploited by these same bankers
and others in support Of the Aldrich cur
rency plan II asserts that after the
crops are moved country bankers nave
surplus OF funds. which they invest IN =
ner cent call loans at New York. Then
In the fall OF the following year ABOUT
5000 900 600 Of this money Is recalled 10
move the crops. And, so II Us alleged IL
is this recall Of such funds that causes
hirh money rates and panics. Referring
20 this subject Controller Ridgely in his
report TO Congress December. 1900
SAYS: rs IL any wonder. then, that the
demand for about 5000. 900. 600 for crop
moving always creates a disturbance? II
Is directly due TO this that the crisis or
October. 1907. assumed the phase OF a
bank panic and spread all over the coun-
try
The first serious defect In this theory Il
that these alleged interior loans don't 20
back in the crop season. During August
and September. 1912. instead or losing
$500 600 900 to interior banks New York
banks actually gained some s30.o0OOOO
In 1911 they gained S2i.o0o.00o from the
interior. They also gained in October
November and December OF both years
AS to tire cash movement OF 1907 correct
cd reports show that. dcducting $4,000
900 national haukno,es sent 10 Washing
ton for REDEMPTION. New York banks
actually gained about Sl,J0o,ooo. CON
troller Ridgely was only guessing.
These interior loans are supposed To rep
resent funds held for farmers by country
banks. but venture TO assert that there
never was a time in our history when the
country banks OF the West and South had
such enormous sums, as is claimed. TO
spare for investment I'm > per cent call
loans The money market rates afford
strong proof on this point In 1907, for
instance. when the interior is said TO have
had $500, 600. 900 loaned here. the rates at
two different periods were as follows:
Feb 1897. Call. Time. May l. 'o7. Gall. Time.
Chicago .....6 Il chicago .....s 81.
The Morgan brief charges the Pujo COM
mittee with putting out figures on the
movement Of crop funds that are 'abso-
iutely incomplete and misleading" but
why didn't Morgan 4 Co. publish the COM
pleted figures? Why Is IL that I'm all this
long brief there is not to be found as
complete figures OF the movement OF crop
funds as I have set forth in this COM
muncation'
II the PujO committee could have forced
the big New York bankers to tell what
particular banks were sending this money
here. the whole truth of the matter would
have come out II would THEN have been
seen that this concentration Is due not 10
interior loans. but 10 tine inflow OF casn
from all parts OF the country in settle
ment OF our annual foreign debts for in
terest dues. immigrants remittances ex-
penses Of Americans abroad and other
items. This cash finds its way into the
institutions controlled by ]. =. Morgan
Kuhn, Loeb & Co and other international!
bankers Most of this money Is reinvest-
ed In our securities and properties and In
Zine and call loans In 1907 foreign bank
ers had over $500. 00O. 900 loaned here
Where did they get al. this money IL It
was not in settlement Of these debts?
Here is question that Morgan & Co
nave never attempted to answer. viii
they answer II now? VIII they also tell
us whore foreign bankers got the hun
dreds Of millions they have loaned here
during the last year? W. II. ALLEN.
BROOKLYN ~ Y March g. 1913