The Birmingham age-herald., 1914-03-19
Foreign Demands Are Ex' pected to Absorb Large
 Amount of Capital
EFFECT OF TARIFF
 ON FOOD PRICES
Statisticians Somewhat Puzzled to Know Why Meat Prices Increase In Spite of Large I'm
 p0rtatiOns
By HOLLAND

New York, March 1S.-(Special )-The suggestion has been maSe frequently since the plethora of money was first observed that it might be expedient for the treas ury department at Washington to with draw the government money which was deposited by Secretary McAdoo sometime ago in the national banks In all prob ability the secretary has taken heed of some indications which point to change in the money market situation sometime 1 this spring. While in financial circles in this city the statement is frankly made that an excess of money is now held by the banks there seems to be feeling that this may prove to be no more than a temporary condition.
 Some of those who carefully study con ditions from day to day find themselves suspecting that instead of an easy money market there may come later in the year a time of stringeney. They base this opinion or suspicion upon intimatons re- 1 ceived from abroad that the United States may be called to furnish gold to Argen- tina and also to furnish funds in greater and greater amounts to some of the Eu ropean money markets. In this country
 
 excepting in good bonds.
 Reports come from many parts of the south that there are now exceptionally 1 large offerings of municipal bonds which it is presumed will be absorbed by those who live within neighbor Ddistance of the communities which have bonds for sale The reduction of the capital of one of the national banks of this city from 5000. 900 to ssoO0.o00 is sometimes referred to as signal showing what other national banks may do, if they are permitted, while the new national banking system is under organization. The national banks as a whole will be compelled to furnish the capital and some of the resources which will be utilized in establishing the federal banks in the reserve district. But the better opinion with respect to the reduction by s2.o00,O0o of the capital stock of one of the national banks of this city is that prevailing business conditions are such as to justify the suspicion that the institution may not be able to earn as satisfactory dividends upon the capital maintained at S5,000000 as would be the case if the capital be reduced. However, the purpose of those who are in favor of reducing the capital of this institution is known to themselves alone. Both of the opinions above cited as to the reasons may be wholly unjustified.
 The First Six Months
 There is a matter which is causing quite as much discussion just now as is the condition of the present or the presump- tive condition in a few months of the money market. That is the curious and unexpected record made of food prices since the new tariff law was enacted. No- body seems to be able to explain this apparently contradictory condition The best summary that is given is this: It is too soon to pass any judgemnt upon the effect of the new tariff law as far as food prices are concerned Yet nearly six months have passed since that law went into effect. If there be any relations be- tween the new law and recent food prices it would seem upon the surface to be an unfavorable one. Yet, it is recognized that food prices may have nothing to do with the tariff law, and yet when this as-