New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-08-27


months and available for rediscount
at the Federal Reserve banks is not
large enough to afford the banks an
opportunity to invest any great
amount of money for short term pc
RODS. The situation gives forcible
emphasis to the need of wider use
of the trade acceptance to provide a
more liquid form of investment for
banking funds.
British Treasury bills having
ninety days to run, which were
offered by j. P. Morgan e. Co., were
eagerly snatched up by the banks,
principally because security Of that
character meets the needs of the
present situation. Money invested
for that period will be available by
the time the requirements in con-
nection with government financing
make it desirable for the banks to
have their funds in hand again.
That seems to be about the chief
problem of the bankers at the mo-
ment-to prevent money from going
stale on their hands while waiting
for the Treasury Department to
make known the time of'the next in
stalment of the Liberty Loan.
The Federal Reserve system has
had comparatively smooth sailing so
far. The few tests which have been
applied have not found it wanting;
indeed, it has COPIED with every prob
lem which has arisen in a way ex-
ceeding the expectations even of its
founders. Yet these tests have not
/ been severe compared to the ones
which it may have to face as the war
goes on, and the manner in which it
meets them will have much to do
with the continuation of prosperity
in America, both during and after
the war. Fortunately, the banking
situation, both as regards the Fed
eral and state institutions, is re-
markably strong, and the credit po-
stion is equally sound. Commenting
On banking conditions, the Cont
mental and Commercial National
Bank, in its annual review of bust
ness conditions, published to-day,
says:
Loans at the banks aggregate
more than ever before, but this is
explained by the industrial activity
the borrowings by the government
contractors, who will not receive re-
turns on their output until deliv.
cries are made, and to the govern.
ment financing. Money is decidedly
fImer than last year, and this af-
fords a better profit with smaller
hazards and makes for a healthier
banking situation. There are indi-
cations of a continuation of firm
money market through the fall.
From all industries, with here
and there exception due to local con-
ditions, business men and banks re-
rort collections very good. In the
implement business especially is this
true. From the farm implement in
Custry comes information that indi-
Gates a disposition on the part OF
the farmer to take advantage of the
Tremendous returns that he has re-
ccived on his products by paying a
greater percentage of the purchase
Irice for his implements in cash.
This has strengthened the position
Of the implement makers. Several OF
these manufacturers have reported
that the cash payments aggregate
nearly one-half Of their sales
whereas in previous years the cash
receipts ran from about 20 to rs per
cent Of the sales. AS the farmer is a
considerable element in the buying
power Of the country, this develop
n.ent is exceedingly encouraging, es-
pecially in view of the attitude OF
the government in stimulating agri-
cultural production through the es-
Enlistment of a minimum price that
affords a wide margin Of profit to
the producer.
Naturally. as the result OF the
sale Of Liberty Loan bonds and the
shifting Of reserves due to recent
changes in the Federal Reserve act,
bank deposits in many sections have
declined somewhat, but the move
mont has been of smaller proper
tons than was expected. Many of
tie ablest bankers in the country
believe, however, that there still will
be further decreases, as the shifting
] o. balances goes on and as add
ucnal government securities arc
offered. One encouraging feature is
! that savings accounts have shown