Semi-weekly herald., 1913-03-20
HOW TO KEEP MONEY AT HOME.

1t seems extremely doubtful at the
present writing if any very important
Legislation regarding the currency will
be acted upon at the special session.
Meanwhile the conditions which gave
pith and moment to the proposals of
the monetary commission may possi-
bly, make themselves acutely felt
within the next year or two. By
this we mean the undue control of the
nations banking by powerful inter
ests, centered in New York, and the
deposit of huge sums of country-bank
capital in New York banks. So long
as these conditions obtain will it be
difficult for the country's banks and
the country's business outside of New
York to obtain in times of stress the
accommodations they need. In the tes-
timony submitted to the Puio commit
tee there was deadly parallel be-
tween the amounts of country-bank
money on deposit or on loan in New
York city and the loans of the New
York city banks on Stock Exchange
collateral. These sums and these loans
on Nov. / for each of the last five
years showed as follows:
1908 .............$ $685., ,469, 900 s5S5, 1852 900
19O9..-........ Gil, 100000 sos, 100000
1910. O....-.......... $50, $4,000 $40, ,19l 900
1911................ 6s2,999, 900 645,93S, 900
1912............... 723,S53,0O0 766,795,000
These figures mean the money of
Des Moines, Little Rock and a thou
sand other towns and cities all shipped
to New York to make stock specula-
ton possible. Seven or eight hun
dred million dollars of country-banll
| money to keep alive stock gambling in
| New York cityl The ostensible reason
| for sending these huge country-bank
\ liquid nature of the loans made there
with and the ease with which this
| money may be withdrawn. But eX-
perience has shown that in three times
| out of five of severe strain in the last
forty years these loans were not Ii
| quid, and the money could not be with
| drawn at all.
The real reason for these huge de-
posits is that speculation on the eX-
changes is so profitable that the men
who conduct these gigantic CANDLES
are able to pay rate of interest for
short-time money which is impossible
to the average merchant. The only
| way that these gambling operations
can be profitable is by tremendous ma
nipulation. And this manipulation is
possible only by means of absolutely
fraudulent wash sales" Actually
these fictitious transactions at times
make up three-fourths or more of the
SALES" on the exchanges. Commits
sioners on these from the larger part
of the expenses of the manipulators
and pools" although the average cost
is not above $5 or Sc per 100 shares
less than one-sixteenth of one per cent.
| A federal tax of another one-siXteenth
of one per cent would practically abol-
| lSn lillS SWlnullHp buSintao. II " Nou'h
not, tax of one-eighth of one per cent
surely would. No legitimate inves-
tor would for moment object to such
a tax-the transfer rate on the eX-
changes is already the lowest fee for
the exchange of any kind of goods in
the world. Such tax would go far
toward destroying the profits of spec
ulators and, therefore, speculation it
self. 1t would probably mean also the
return of upward of half a billion dol
lars to Des Moines, Little Rock, and
others, to the channels of legitimate
business. 1t would in no wise inter-
fere with the free circulation of the
nations bank capital or the flow of
money where it is needed. But it
would put an end to an artificial mar'
ket for that money in one small sec
tion of New York city, and likewise
do much to eradicate an evil almost
Universally recognized and universally
| demned.-Collier's Weekly.