The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-10-19
FINANCIAL REVIEW
| OF THE PAST WEEK
Bearings Of the Railroad Rate
Case on the Stock En-
change Problem.
ELEMENTS OF A SOLUTION

Unmistakable signs continue to be OBJ
servable that money or credit in the
domestic market Is working into a more
comfortable position. Some OF the latest
OF these signs are afforded by the further
shading OF commercial paper discounts so
that as low as s per cent. has been re-
ported for high grade names. Another
indication Is the reduction In the last few
days of the rate for new call loans to
Stock Exchange borrowers. accommoda-
ton now being obtainsble at per cent,
compared with the per cent. figure
which has ruled for weeks. From various
centres also come advlces to the effect
that banks are contemplating the retire
ment OF Clearing House certificates as well
as emergency currency. although II Is
likely to be long time before there is
any substantial change in these respects.
The most important token is furnished
by the disposition of the bankers VINO
are displaying Increasing courage in the
proffer Of credit and exhibiting striking
willingness to cooperate in various pool
or syndicate schemes for the relief OF
commercial and financial conditions. More
than one good result has already followed
and will follow upon the creation of the
foreign exchange gold fund, and the Inn
petus which was given thereby to united
effort IL revealed In the support lent to the
project for a Sl50.oO0.0O0 banking pool
for loans on cotton.
Just AT the moment this Is quite the
most ambitious plan under way in the field
Of domestic business and II may lead 10
very desirable consequences. To Insure
this. however. the original conceptions Of
the promoters of the plan should undergo
some modification, 1t will be far sounder
banking to regard the distress of the
cotton grower. who is confronted with the
inevitablity OF low prices, than to con-
slider the requirements OF the consumers
OF cotton. As a scheme for solving the
problem presented by the situation In
cotton the banking pool can best be made
to serve economic ends in connection with
the reopenng Of the cotton exchanges.
which should be FASTENED in order that
there may be a resumption of those deal
ings In futures which will absorb the
1914 cotton surplus In legitimate way.
For such an absorption a banking syn
dictate TO make loans on cotton would
be a very useful adjunct II IL were less
syndicate to enable growers TO hold
their staple from the market than to aid
buyers In contracting for their supplies.
No one can say that sound banking would
be denoted at this s!cle by planning to
finance the Withholding of cotton from
the market. No one can deny that II
would be the soundest kim OF banking
TO finance a movement of cotton into con-
sumption. that Is, to finance buying
movement
Money Conditions and the Rate Case.
Too much 10 not TO be expected in
h.
doubtful fortunes OF the greatest war In
history hanging in the balance. The
needs OF commerce and industry can be
met with accommodation for which full
prices are charged. The essential thing
Is that accommodation should be obtain
able at some price by those who can
employ It profitably at any price. More
over the rate OF interest must In the
long run be fair with due allowance for
any given set of economic factors.
The business of bankers is to make a
profit out Of rendering the service OF
loans to trade and industry They can
not for any length of time exact a greater
return than general business can AFFORD
to pay II they make the attempt funds
accumulate rapidly and the banker finds
his hands full OF idle money, which 10
OF all things the most persistent seeker
after employment. and It's quest is sig
nallzed by a fall in the rate OF interest
until use Is found for the excess of funds
To some extent indeed this process Is
now being witnessed and domestic money
conditions are becoming propltious Tor al
least a partial recovery in general pusi-
ness II some impulse is furnished TO a
recovery of business confidence. why
should not improvement emanate IRON
the decision of the Interstate commerce
Commission IN the reopened Eastern rate
case. the hearings in which begin TO-
day?
There Is no reason why these hearings
should he protracted. II the commission
cs going 10 be tolerant of those agitators
who make a living out OF hghting th'
railroads valuable time ts going 10 %
wasted As an administrative pony tht
commission should OF Its own knowledge
nossess the necessary facts on whlcf
10 base an Intelligent ruling and the only
QUESTION 10 the point is whether or no.
n has begun to realize the change whlcf
Is taking place in the relations OF pon'ic'
and business. ~,
or late the commission has shown itsei'
10 he obse ssed with notions readiiy &C
cepted by bureaucrats In recent years %
the relations OF the citizen TO the state
These nations have represented the STATE
as go supreme that the citizen was mao
for IL. although all American traditions
are 10 the contrary. holding that the stat'
was made for the citizen. AS coroIiar9
10 the new bureaucratic idea the enter
nr,se Of the citizen, what Is called pri
waite enterprise, must be treated as sup
ordinate to public organs, a subordinauoi
! Illustrated in the case OF the railroads. II
which political progress has gone so IA
as practically 10 deprive the owners o
property of the essential prerogatiVes o
ownership.
The biggest thing which the European
| war is doing in the United states to-da!
Is not denoted by the destruction or Amer
! lean prosperlty but by the substantial
contribution which It is making TO gu
/ future prosperity by revealing the rea
| nature and basis OF business. The war u
showing to politicians that to which the!
| have for years been blind, namely tina
| the maintenance and extension OF bushes
is utterly dependent on the opportunitie
| and incentives afforded for the accumula
| ton Of capital and it's investment.
How the Rate Case Affects securf
In various departments OF Government
! Washington has already begun 10 evinc
| a shrcwd apprehension that political atti
| tudes toward business must undergo
vast alteration, and patriotic support o
the Government in the present crisis !
not 10 be mistaken for a concession OF tn
| wisdom Of much of the political recor
made up In Washington during the yea
! before the war II does not obscure tn