The Birmingham age-herald., 1913-06-19
BANKS HUSbAND|NG
MONEY TO ASSIST
IN HANDLING CROPS
Enormous Demand Antici-
pated in fall-Crops Ex-
pected to Break Records
NEW TARIFF CHANGES
MAY REQUIRE MONEY
Disparagement of Underwood Bill
Is Rarely Heard in Financial
Center--Banks Want Feuds
in Fluid States
BY HOLLAND

BY HOLLAND
New York, June 1S.-(Special )-Whet
are the cautonary or anticipatory meas
ures which the banks of the United states
are now taking and why is it deemed wise
TO adopt these measures? are questions
which have been asked of some of the ex-
perienced men of finance and bankers of
this city.
Ioday funds are in plenty. The banks
OF the United States, at least the leading
banks of the great financial center, are
carrying reserves in far greater amounts
than the national banking law requires.
These reserves are increasing. funds are
flowing in from the interior to the large
financial centers, Ultimately no doubt to
find lodgment in great measure in the
banks of New York
Yet 1t has been almost impossible to ne
gotiate large loans and even the railroad
companies have been compelled to a con-
siderable extent to rely upon the market
ing of short time notes for funds Of
winch they are in immediate need. Money
market conditions were such as to make
inevitable the sudden receivershp Of
what, Notwithstanding its bankruptcy. is
still one of the great railroad systems Of
the United States within whose power are
great possibilities for gaining resources
and strength
Inc answers to the questions above
stated have been, on the whole, of SINH
lar purport. They contain diagnosis
not only of world wide but of domestic.
financial and material conditions.
First of all, there is the prospect of a
harvest perhaps unprecedented in quality
and quantity. Certainly unless there be
very disastrous climatic condition when
hot weather comes the harvests are to
compare favorably with any the farmers
have ever garnered. There is a reasonable
prospect that In its entire volume 1t will
be record making harvest The money
needed whereby the harvest can be
financed from the fields to the market
places will In any event be reckoned by
many millions. The currents which now
flow from other parts of the country to
New York bearing currency in great vol
umes will inevitably be reversed when
harvesting begins Therefore these funds
now on deposit in New York will be with
drawn and in all probability heavy dis
counting may be asked of the New York
banks.
The Crops Must Be Moved
For it is automatic in American business
that the crops must be moved as speedily
as possible from the farms to the mar
kets. We depend to so great an extent
upon the money received for these crops
for our industrial and financial wealth
that 1t is vital that whatever else in the
way of demand may occur the crops first
of all must be taken care of.
The great banks of the United States
are now conserving their resources SO
that they may be able to meet the de-
mands, however large, which will surely
come in the fall For that reason the
banks must have liquid assets and liauid
funds in abundance. They must be care
full at this time not to make large loans
extending over a long period of time, for
If they do they may find themselves ham,
pered in the early autumn and through
out the fall when they are approached
by those who want the money with which
to handle the moving of the crops.
The Tariff and the Banks
1t is one of the iarest of experiences
to hear anyone in this financial district
speak In criticism of the Underwood tariff
bill. That measure is regarded as cer-
tain to be formulated into law. What use
is there. therefore, to criticise what is be-
lieved to be certainty? That is a state
ment which is often heard. But it is
deemed inevitable that after the Under
wood bill goes upon the statute books
business exigencies will be created which
will make demand for funds reasonable.
even vital; for If business cannot be ac-
commodated then the immediate effect of
the tariff law is likely to be disastrous.
Banks or the United States are there
fore, now beginning to husband their re-
sources and to make preparations for
Keeping these resources In such constant
control that they may continue to be Ruid
throughout the remainder of the year.
Business Authorities
The prospective opening of the Panama
canal, the marvellous Industrial develop
ment through the south and the impulses
which will tend greatly to stimulate gem
eral business activity will, bankers saw.
be reflected in heavy demands for bank
ing accommodations in the fall and in tina
early winter. 1t is not merely expedient
but even, reasoning from the selfish point
of view of bankers. advisable, that the
American banks be in position to give
proper financial aid next fall to American
business That of itself will result. sooner
or later. in creating conditions which will
be of profitable Importance to the banks
themselves.
Then. too. there is the certainty that in
the great money markets Of the world
heavy demands will be made for funds
both by nations and by business interests
These may serve 10 impair the opportuni-
ties the United States otherwise would
nave to secure funds in Europe. There
fore. the American banks must nurse
their resources and keep them under in
stant control In order that they NAV he
what bankers call fiuid-readily avaiia bla
In the late summer and throughout the
fall