The Birmingham age-herald., 1914-01-01

lnenl of the controversy with the Amer
lear Telephone and Telegraph company,
that government ownership of public util-
titles is imminent or that large corpora
tons must perforce submit to tedious
aud expensive litigation. with final adju-
dication by the supreme court to deter
mine their powers and limitations, or
then right to exist.
Nowhere is the public more directly
concerned in the speedy settlement OF
what is termed the trust question than
hete IL the Birmingham district, and no.
Where IS a return 20 prosperous condi-
tions in iron and steel products, coal and
lumber more eagerly s.waited. The rail-
roads are great consumers of these COM
modities, and it is known that their
requirements are large. Whether the
problems now confronting the railroads
are due to inadequate revenues, to high
interest rates, to stock manipulation or
to improper management are questions
concerning which opinions differ, but
there seems to be a growing sentiment
tfat there is merit in the application o.
the eastern roads for authority to in
crease freight rates per cent, and there
Is general belief that favorable action
on this application will result in the
placing of large orders by the railroads.
followed by renewed industrial activity
unemployment of idle men and stimula-
ton of trade.
THE course of the money market in the
near future is uncertain. January dis
bursements for interest and dividends
through New York banks win approx
mate $3.50. 090,000 and much of this sum
should seek reinvestment. European
banks are i'm stronger position than for
some time past; opinion in London favors
easier money in the iinmediat4. future,
ard perhaps a relaxation cf the tension.
The Bank of England is expected soon
to reduce its rate from to AZ per cent,
the German Rechbank at Berlin has in
creased its reserve by the equivalent of
$685. 100000 during the past - months, and
has recently reduced its rate to per
cent, and in Vienna, cenrcr most direct
ly affected by the Balkan war, the Aus
tro-Hungarian bank has reduced its rate
from to 51a pei cent; the official rates In
Brussels and Amsterdam are per cent
and in Paris the Bank of France quotes
a rate of 4 per cent. In New York call
money rates have recently ranged from 3
to per cent, with choice mercantile
paper obtainable at from ~ to per cent.
The south is holding a considerable guam
tity of cotton, most of which will be
marketed before the new crop is planted,
Easier Money Predicted
Altogether the outlook Is for easier
money in January and February, but
most authorities do not expect return
to the low rates which prevailed few
years ago. They call attention to the
fact that bank clearings indicate volume
of trade of only about 10 per cent below
normal, and that the securities market
forecasts more cheerful tone.
The pending return to the treasury of
crop moving funds, the gradual refund
ing of United States 2 per cent bonds into
3 per cent as provided by the new cur
rency law, the continued decline of high
grade government securities like British
consols and French rentes, the prevail
ing stringency in Canada, and the chaotic
conditions in Mexico, the heavy financial
requirements of states municiDa lites
railroads ard hydro-electric enterprises
and the geenral demand for real estate
and farm loans all seem TO preclude the
possibility of a long period of cheap
money.
New Currency Law Explained
"Our new currency law, excellent
though it is in many respects, does not
create any new real money, but by mobi-
lizing reserves, and by providing an elias
tic currency system will prevent undue
stringeney and will equalize ra4s
throughout the country, and while ample
time, three years. will elapse before bank
reserves will be entirely transferred to
b paid in within the next six months
The law provides that not less than eight
nor more than II of these banks shall be
established. They will not deal direct
with the general public, but will be bank
ers banks. whose stock will be subscribed
by the banks entering the reserve sys-
TEN, individual investors being allowed
to participate only in case banks do not
join in numbers sufficient to provide the
capital required. upon which dividends
at the rate of per cent win be paid
Each regional bank will be governed
by nine directors. six to be chosen by
the stockholdng banks and three by the
federal reserve board, consisting of the
Secretary of the TreaSury. the Comptrol-
Ter of the Currency and five others to
be appointed by the President. This
board will control the policies and fix the
discount rates of all the regional banks
and will have general supervision of all
their operations.
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