New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-08-05
By WILLIAM JUSTUS BOIES
.HIS is the season when the
thoughtful interior banker

thoughtful interior banker
- usually takes his bearings
in the effort to gauge the money
market developments of the harvest
ing period. In the last two decades
the currency movement has turned
against New York in the first or
second week of August about eleven
times. The movement is never the
same, for almost 10000 banks en-
gage In it, and in war times, when
extraordinary government loans are
under discussion, the problem Of
moving what will probably be the
largest total crops ever harvested,
with the aid of farmhands earning
81 or So a day, causes the shrewdest
money changer to sit up and take
notice Of the possible bearing of a
10 per cent call loan rate in July.
The present situation in the money
market has exceptional interest for
tho banker or business man with
broad enough vision to appreciate
the cross-currents caused by billion
dollar loans, high taxation, huge adj
vances to our allies, Red Cross con-
tributions, war charities, corporation
financing and record foreign trade
settlements falling in the period
when the Sammies of the agricult-
ural West are mobilizing their
forces to insure well-filled bread.
basket for America and its allies.
This means that the money market
problem this year has enough red
blood in it to appeal with force to
the man IMMERSED in the technical
details of finance. 1t is the mathe-
MATES of making both ends meet, il
the war of civilization is to be won
in the only country possessing food
surplus large enough to keep the
Allied troops at fighting pitch.
Thanks to the rediscount facilities
of the Federal Reserve system. this
extraordinary demand does not find
our 1000 national banks engaged in
the oldtime struggle to protect
volume of scattered reserves ct the
time of year when restriction OF
credits means increased work for
the bankruptcy courts. 1t is easy
70 visualize the barriers that would
be encountered now were we at
tempting to adjust the banking ma
ohinery of the Civil War days to
the problems of European war
finance. We have been spared that
trial, but the operations of the last
six months are likely to provide the
acid test for our new banking system
in way as nothing else has tested
it during its brief history, which has
been virtually coincident with the
progress of the European war.
The Views of
Interior Bankers
A canvass just completed shows
that the men at the head of many
prominent interior banks believe that
the crops will be moved without
money market disturbance this year,
notwithstand the government fnanc-
ing and the growing demands of
mercantile borrowers. The chief I'M
certainty has to do, however, with
the effect of extraordinary legisla-
ton, controlling food supplies and
the marketing of the crops. One
banker says that the government
may take over the wheat crop and
finance it after it reaches the ter
minal elevators. This would create
q remarkable situation, leaving sur
PLUS money in the hands Of the banks
that are accustomed to lend heavily
on terminal receipts. Another points
out that inasmuch as the bankers of
tho country have been virtually
called upon TO underwrite the gov
eminent loans, they must finance
tFose operations ahead Of everything
else. Perhaps the most striking dis
closure, however, is the view ex-
pressed by various financiers, that
tho most difficult problem Of the
money market has 20 do with the
curbing of speculative enterprises,
so ss TO insure smooth sailing for
the government loans and needed
assistance for the great industrial
corporations, whose tax burdens will
sc largely enhanced, in consequence
Of the war and the extraordinary
OUTLAWS which American participa-
ton in the European struggle in
wolves.
High Prices
Add to Demand
Interest in financing the staple
crops has been increased by the
,ocord -breakino yalues which obtain.