The Brookings register. [volume] (Brookings, Brookings County, S.D.) 1903-1971, 1914-08-27

Another important sign of improve
ment is the diminished tension in the
financial world. International banking
arrangements are being gradually re-
sumed, and foreign exchange opera
tons have now been reopened on the
continent Cn a limited scale. The New
York stock exchange remains closed
and may not be reopened until ii is
known what the London exchange is
likely TO do. To open the New York
exchange under existing conditions
would De sheer folly. since it would
make New York the dumping ground
of all the needy sellers in Europe and
precipitate fresh decentralization in this
market.
Meanwhile a business of very con.
siderable Importance has been accom-
plished under the present methods Of
limited transactions for cash under
approval of the stock exchange COM
mittee of Five. This plan has worked
very satisfactorily and has lone much
toward furnishing relief, prices being
maintained at the closing of July so,
and in some cases showing a slight
improvement.
Our bankers are doing their utmost
to settle our domestic money situation,
which has been greatly relieved by
emergency circulation, by the release
Of government funds and by the is
sue of clearing house certificates. Thus
far all infiationary proposals have been
sternly checked; and it is to be hoped
that this policy will be firmly adhered
to. Imitation might help now, but
would eventually bring on vastly worse
conditions than yet seen.
A fair idea of the effects of the war
on the United States can now be had.
AS the effect of the first shock passes
away, it is seen that German COM
merce and industry will suffer more
than any other. The United States
will temporarily suffer from the loss
of German imports. These, however,
will in due season be compensated for
by supplies obtained from other coun-
tries and by the creation O: new or
stimulus of old industries in this coun-
try. This may or may not revive the
tariff as an issue.
Our steel industry will ultimately
also benefit, for many of the orders
will now be filed in America. Our cot
ton mills may reasonably expect larg-
er orders for export, which will some
what offset the loss of German pur-
chases of raw cotton. Germany trans
acted a very large trade with South
America, much of which she will lose
to the United States.
The American sugar industry will
also profit largely by the temporary
loss of the German supply. The worst
of the shock of war in this country has
already been felt. We may see its
later effect in high prices of food
while the d~islocation of industry will
temporarily increase the number OF
unemployed.
Ultimately, however, Jul industries
Will receive a great impetus, and if any
country in the world can possibly
benefit from the colossal disaster now
hanging over Europe it will be the
United States, which is happily free
Of all foreign entanglements and
should absolutely keep SO.
Considering the abnormal conditions
which have prevailed since the Euro
pean nations became engaged in a
death struggle, the banking interests
throughout the country have handled
their affairs remarkably well.
In about two months time it is IN
derstood that the federal banking sys-
lem will be in operation. 1t should
. NC SIdlltN II a IuuNA iO IihiN, ~
possible, for the simple reason that
when this becomes a fact the national
banks throughout the country will be
permitted to reduce their requirements
quite considerably.
1t is estimated that the deposits OF
country banks amount to about $780,
900, 900. Under the new law the re-
serve on these deposits will be re.
duced from Is to II per cent, which
will release $4,000, 900. The deposits
of national banks in reserve cities are
placed at around 81, 900, 600, 900. Under
the new law the reserve will be re
duced from 25 to Is per cent, which
will further release 5000, 900, 900.
Deposits of national banks in centra.
reserve cities are, say, $500, 000, 900
the reserve requirements of these
banks will be reduced from % to Is
per cent, which means an additional
reduction in reserves Of SIP, 000, 900.
From these figures it will be seer
hat the total amount to be thus re