Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1914-01-01
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Those large business enterprises
which are compelled to do their bor-
rowing upon the general market and
which have been in the habit Of having
their notes sold to banks turnout the
country by note brokers will be inter-
ested to learn that one Of the oldest
firms OF note brokers In Chicago thinks
that the new regional bank system will
increase the market for first class
paper in the long run. They explain
banks have been out Of the market for
commercial paper for some time and
that the entire demand has been from
the smaller banks. They predict that
these smaller banks will still continue
to buy well-rated paper so as to have
something readily acceptable at the
regional reserve banks as collateral for
currency and that the regional banks
themselves will probably become pur-
chasers Of the best paper.
W. T. Richards Company, Chicago,
subject, says:
las to the effect on the commercial
paper business: Opinions on this phase
OF the subject run all the way from
that Of prominent banker o. cAica go,
who thinks it will eventually neH the
note brokers out Of business, TO that
OF one OF our competitors. who thinks
It will be the finest thing for the COM
mercial paper business which has ever
happened. 1t is quite sure TO keep the
banks in the larger cities ouhsof the
market for paper for some time to
come This, however will be no new
condition to US, as We have gotten
along all Of this vear with practically
no buying from any of he large city
banks, and yet our volume If business
this year has run a little ahead Of last
years volume, which shows us ,tnat We
can. IL necessary, get along withpat the
large banks. The reserve yequire-
nents FOR country banks being smaller
under the new law than they are at
present Will undoubtedly result in more
paper being purchased by them. and
should also result in bringing many
banks into the market :or paper which
have formerly not been buyers.
I'VE can see no reason why, under
the new system, the regional banks
should not at certain seasons be buy
ers of paper from brokers. as they are
expressly given the right to buy in the
market, with or withou: the endorse
ment of any member bank, the same
kind OF paper as is made available for
discount by member banks. Purchases
of paper by these regional banks
should to a great extent. offset the
lessened purchases by banks OF the
large cities.
I'VE can see no reason for any radi-
cal changes in methods OF financing by
such concerns as your ewn, or. In fact.
by any borrowers. except that some
very large lines Of credit now given by
banks may have to be cut down. In
which case the borrower would natur-
ally turn to the note broker Tor the
additional amount Of credit required.
This also would be a good thing Tor
our business.
I'VE feel then, that the general imam
cial situation will be improved: that
no radical adjustments will be neces-
sary for borrowers: that the banks will
not find il extremely hard. or impos-
sible, to adjust themselves to the new
and that the commercial
paper business will be greater In
volume than II has ever been before.
We also believe that 1t is a good thing
TO have the bill passed and out OF the
way as disturbing element IN the
general situation"