The sun., 1916-12-05
MONEY Ats
ON STOCK EXCHANGE
Only 100000 Placed at High
est Rate Since Federal Re-
serve System Began.
BANKS HAVE INNINGS
Brokers Complain Bitterly Of
the SituatiOn-Trend Down
ward Predicted.
BANKS HAVE INNINGS

Gail money on the New York Stock
Exchange advanced yesterday to Is per
cent, which In by far the highest rate
since the Inauguration Of the Federal re-
serve system. Only $780, 900 was placed
At the high rate. that transaction being
negotiated for . customer Of one Of the
large Wall Street banks. But the pre-
vaiiing rate was 10 per cent, and that
rate was higher than n on record since
January 3. 1914. . day antedating the
institution Of the Federal reserve system.
Brokers on n Stock Exchange. sur
feited with a money rate averaging
little II any nor han az per cent In
the past . and q half. complained
bitterly. Their pronts from interest
charges DO not run 90 high il do those
Of the banks. though In times OF low in
tsrest rates they charge their customers
more than do the banks.
On the average their customers should
not. In banking opinion. be charged more
than 3 per cent. this ear. whereas. as
a matter Of fact. with interest COM
pounded monthly In most houses. the rate
CHARGED by brokers to their customers
has beer much higher han the rate
charged by the banks to the brokers.
Retort Of Dankers.
Yesterday. for almost the first time In
eight years. the banks had their innings.
| Brokers complained that the banks
| could rediscount their commercial paper
; AZ the Federal Reserve banks at "A
| per cent. Bankers retorted that brokers
| could rediscount their commercial paper
II they had any. The Federal reserve
| act does not permit the r~ed!scount!ng OF
loans secured by Stock Exchange col
lateral.
Nobody In Wall Street thought yes
terday OF commercial paper. That was
quoted nominally at 4h per cent. All
eyes were centred on the call money
rate. Last week. when the rate for com
mercial paper or on other loans from
regular customers was even, several in
terror cities declared themselves loaned
up.
Yesterday afternoon one OF the largest
banks got instructions to loan $4,000 oO
on the Stock Exchange on call. though
last week the same institutions were
loaned up for crop moving n manufac-
turing. Boston. Philadelphia. CHICAGO
st. Louis and Minneapolis. to mention
only a few interior centres. telegraphed
their New York principals to put their
money on the Stock Exchange when the
rate got above 8 per cent.
More Gold Coming In.
In the late money market rates
dropped to 7 and S per cent. Long be
fore that It had been announced that
$50, 900. 900 gold was TO be received h,
J. =. Morgan & Co. this week. Before
that It had become known that the sac.
OO0. 900 Russian gold which arrived In
San Francisco last week had reached
this city.
LONG before either OF these evente i
hal Beer known that some OF ths BANK
dealing in commercial paper would re
discount at Federal reserve banks AND
then lend their money on the Stock tN
change in times OF stress there and hell
eQualize the rates.
On all these and many other account
bankers were pretty much OF the opinion
that the trend OF money rates would b
downward from rs ,er cent. ana tina
though the money market might am
rrotabi, would be firm the old remedia
Influences OF competition between broke
and merchant would he stabilizlrc, as i
, the competition between broker an
banker.
In fact a hardening tone NJ CONNER
cial ,r,,r an IN eaeirG OF Of StNc
Exchange accommodations were almos
%univ.rsL,y proii:ei.