Evening star. [volume] (Washington, D.C.) 1854-1972, 1917-01-21
AMERICAN BANKS
FILLED WITH CASH
Good Discounts Are More in
Demand Now Than Are
Deposits.
LOAN TO SOUTH AMERICA

NEW YORK, January 2o.-Plethora
Of money and decreasing loaning rates
continue to be the prevailing features
Of the financial situation. Demand
loans at 1 II per cent on stock exchange
collateral, the lowest figure since June
Of last year. and corresponding recess
sions in the longer maturities. are in
dicative of the general trend of flnan-
cial conditions. not only in the big
monetary centers, but in the country
districts as well.
The president of the American Bank
ers' Association, who is also president
Of a national bank in the middle west,
stated in New York this week what the
banks most desired was not more de-
posits. but more discounts. The wave
Of prosperitv that has been sweeping
over the agricultural sections of the
south and west has been translated In
terms of greater financial independ-
ence for the farmer. and consequently
his obligations to the banking institu-
lions have been considerably reduced.
When we consider that the farmer, who
a few years ago received $3.50 for 1000
bushels Of wheat, now takes IN S1,750
for the same product. and that for
carload Of hogs. for which few years
II
can claim $1,000 as his share of the
proceeds, we have a clearer conception
Of the enviable position of the Ameri-
can farmer.
Growing Financial Problems.
In New York the money market is
governed more directly by the move
ments OF the stock market and of
large financial projects. The new posi-
ton taken by the United States in the
international money markets has
greatly increased the number and the
magnitude Of our financial problems.
even II 1t has increased our prof1ts
and added to our prestige.
Transactions on the stock exchange
have been on a very limited basis, and
fluctuations have been between narrow
limits. The general public maintains
its attitude Of apathy toward the
speculative markets. and professional
operations have accounted for what &C
tivity has been shown on the big
board" Attention has been called to
the fact that while the recent liquida-
ton in the stock market has been one
Of the heaviest that Wall street ever
without excitement and without the
occurrence Of a single failure. 1t is
also to be noted that whether the war
ends now or later the imitation OF war
stocks has been effectively checked.
most of the expectations OF big prohts
not having been realized. The high
price of raw material and the steady
rise in wages have altered conditions
so that the difaculty of properly han
ding such orders has been greatly in
creased.
New Foreign Financing.
Since the federal reserve board in
November issued its warning against
the purchase Of foreign treasury bills.
particularly those Of the European bel
ligerent countries. no transactions OF
this character have been reported.
banking syndicate. headed by J. p:
Morgan & Co, has, however. purchased
an issue Of $15.0O0.0O0 ten-year q per
cent convertible notes Of the Central
Argentine railway. Heretofore all or
most Of this Argentine financing has
been accomplished through London
and Berlin, and this deal will give
American interests an excellent 1907
hold in the financing OF South Ameri-
II is understood that the proceeds of
the notes are to be utilized to retire
what is practically an equivaient
amount Of short-term Indebtedness OF
renrssented by the two issues Of notes
which are to be called In and paid on
in Accordance with the desire of the
MANAGEMENT to cooperate with the
British treasury in securing American
exchange.
Railroad an Ole, One.
The Central Argentine railway is as Ole
as a large part of the railroads OF the
limited States. 1t was organized in 1865
and now operates about $500 miles OF
road, or not far from the mileage directly
owned either by the New York Centrai or
Pennsylvania railroads Cines east OF
Pittsburgh) or the Union Pacific. hall
again as big as the Norfolk and Western
the Baltimore and Ohio or the Louisville
and Nashville.
heretofore been issued in this market
and probably the knowledge which our
Investing public has Of the property could
be summarized in the statement that the
company's credit has always been high
so far as is known. during the last ten
or fifteen years 1t has never gone into
the open market for the sale Of securities
but has obtained all Of its new capital
from its own security holders, by direct
offer to them. Its 4 per cent debenture
stock. which corresponds as nearly as
comparison permits to our first mortgage
bonds, sold above par In London for years
at a time when there were very few
per cent bonds Of American railroads
which were quoted at anything like sc
high a price.
Issue of Small Greenbacks.
One of the evidences Of good times
has been the increasing call for coins
and bills Of smaller denomination. Sec
rotary McAdoo has announced his in
tention to resume the issuance of 81
and 50 notes commonly known a,
| "ereenbacks" This is hardly In accord
ance with the popular idea OF the
| areenback. the retirement of which has
been advocated both by bankers and by
government officials for some time. and
Particularly since the issuance of the
| federal reserve notes.