The diamond drill. (Crystal Falls, Iron County, Mich.) 1887-1996, 1913-02-01

stances. call for full statement OF the
concerns business. or may even employ
outside accountants 20 60 over It's
books 1t may. If II sees ft. demand
20 know whether the loan required is
based upon an actual commercial
transaction. and may demand evidence
OF the transaction.
II is often found advisable In cases
of large loans on commercial paper 10
split the loan into number of notes
which are sold by note-brokers TO
different banks. IL not infrequently
happens that small bank will buy
four or five pieces OF welI-known ccm-
mercial paper in this way as an invest
nient for idle funds; and in that case.
il some unexpected demand is made
upon the bank so that il needs funds
promptly. il will send as much Of this
paper as may be required to fiji it's
need, to it's city correspondent tor re-
discount.
But by establishing broader mar
ket for such paper. interest rates would
be lowered in this country II the
market were still further broadened. 10
become International "a we'll IA ma
tional in scope interest rates obviously
would be still further lowered The
American me chant would have TO pay
less for the capital necessary for his
business tits obvious that the cost $
borrowed capital must enter into the
expense of conducting every large bus
iness. II interest rates are increased.
the cost must be increased of every ar.
ticle into whose production or distzi-
button the use Of borrowed capital en-
ters.
The lower interest rate prevalent in
England and on the Continent give
merchants and manufacturers there an
unmistakable advantage over their
competitors in the United States. En-
gland 3 unrivalled monetary system
and her low rates of interest to indus
trial enterprises account in large mea-
sure for her commercial supremacy.
The Panama Canal, opening vistas
Of new business opportunities TO Amer
lea, is on the verge of completion
Will we permit 1T TO become an added
nelp TO foreign nations. or will we. by
adopting scientific banking system
equip ourselves to reap full advantage
Of itf That is question for the people
Of the United States TO answer. II
should be answered before the canal is
completed The answer should be in
the form of competent and expert
remedial legislation.
II Is readily apparent that CONNER
cial paper bridges the interval between
the production and the cons umption Of
goods. and gives the merchant or man
ufacturer ready funds for the continu
ance Of his business. without waiting
until the purchaser or consumer. TO
whom he has extended thirty, sixty. |
or ninety days credit. to-make pay
ment. Further than that. it encour
ages him to use his money freely in
the way Of experiments in improved |
methods and improved. machinery
feeling confident that he can be safe
from financial embarrassment in so
doing
When we have new banking system
for we must have one IL we are TO
avert another panic-it will be proper
TO have some arrangement, under care
ful provisions and regulations, where
by the banks may rediscount their
paper with cooperative
agency at two-thirds or three fourths
lis face value. This would provide
hem with prompt relief in times of
ltress'a and would nelp TO prevent money
oanics Such a provision certainly
should be a part Of any measure look
ng to a revision and improvement OF
our present banking system
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