The Washington herald., 1918-08-06
HUGE BUSINESS !.
CAUSES STRAIN
Holland Points to Call for
Crop Moving Funds
as Symptom.


In the August circular OF the Ma
tional City Bank IL u stated tnal
the country is trying TO do a greater
volume Of current business than II
has the facilities for doing" Opinion
Of this kind has been heard in the
financial district for some time. The
United States, with its Industries and
agriculture, Il carrying on such an
enormous amount Of business that
even with the aid OF the government
there IN embarrassment because the
facilities for meeting the require
nents are not equal 70 the demands
A few years ago the statement was
made that the West, or at least. that
part OF the West which II chiefly oc-
eupted with agriculture. was gaining
In prosperity 50 greatly that II would
soon be able 20 finance its own needs
during the harvest season. Predic-
ton was made in 1900 by the late
Fredrick d. Tappan-who as chair
man of the clearinghouse committee
in times of great financial peril and
as president for years Of an impor-
taat New York bank had opportuni-
. ties for learning accurately what
rnoney-market conditions were in
various parts OF the country-that
within ten or fifteen years the farm
ers Of the United States would be
able themselves to finance the move
rnents 81 crops to the markets. Mr..
Tappan thought he detected good
evidences of the coming Of the day
when the long established erop-moy-
ing rule in this financial center would
be terminated.
Crop Moving Was q worry.
After the United States gained
importance as an exporter Of agri-
cultural products, the custom was IN
New York City and to some extent
in other financial centers to begin
preparations in June for meeting
the call which would come late in
the summer from the agricultural
regions for funds. In the aggre-
gate large amounts were reserved
for that purpose. One Of the Sec
taries of the Treasury in the
early years OF the present century
decided to make advances out OF
the Federal Treasury in order to IA
cilitate the financing of the crops,
The movement OF money from
financial centers, especially from
New York to the West, represented
after a while in the aggregate a
very large amount After the farm
eTs had financed their crops and re-
ceived pay q great deal of this
money was returned by out-of-towr
banks to those of New York City,
When the European war began
the Western farmers were in such
prosperous condition and the banks
In the agricultural regions were SO
well fortified that the demand for
advances from the East became very
small. 1t almost seemed that Mr..
Tappan's prediction was about to
be verified by the event.
oId Call Comes Again.
Now in addition TO the stupendous
financing which is in progress
throughout the United States and
the certainty that before the end OF
September the people will be ask
ed to subscribe to the fourth issue
of liberty bonds. there comes a call
for aid. in moving the wheat which
il now being rapidly harvested to
the markets or elevators, These
are exciting days for the wheat
farmers. especially in the, North
west, for 1t sometimes happens that
early in August the first frosts come
This Is sure to result in impair
ment OF crops. Therefore the farm.
ers are anxious, hoping that the
frost will be delayed until all the
wheat Is harvested. There are var
fous estimates as to the amount OF
wheat in bushels which will be har-
vested this year. the opinion COM
monty held Is that unless frost i'm
pairs the harvest in the Northwest
the amount will be approximately
500, ,OOO.00O bushels. In view of the
fact that the price for wheat has
been fixed there remains no reason
for farmers to hold back thelI
wheat, as in the past they have done
In some instances in the hope ot
receiving later in the year higher
prices. Therefore it Is presumed
that as soon as the wheat is har,
vested II will be sold by the farm
ers. OF necessity there arises g
demand for funds or credit will
which to facilitate this movement.
Funds stnI Needed.
One incident associated with the
financing Of the wheat harvest IL
considered Of such importance that
reference Is made to II in the Ma.
tional City Bank circular. Pre-
sumably In the winter wheat terri.
tory there should be at this time q
relaxation of pressure for funds and
yet, according to the City Bank au-
thorities. no evidence Of relaxation oi
this kind has yet appeared
The banks by reason OF the appeal
Of the Secretary OF the Treasury are
purchasing Treasury certificates which
will be available hereafter for pay.
ment OF liberty bonds This entails
great demands upon the resources oi
the banks. Fortunately there remains
the Federal Reserve System. to which
appeal Is certain to be made, in fact
IS row being made by the banks, %
tn tAey may be able through re-
iiseod,. ing to give all the aid that
L. reasonably asked for by theIl
clients The situation IL not crit
IcaI. The managers of the Federal
Reserve System and the leading bank
srs Of the United States will I'M
ioubteIy be able fairly well to meet
the situation until after the subscrip-
tions for the Fourth Liberty Loan arr
made. Nevertheless 1t Is expected
hat the demand for money will con-
ttnue to be so great as to result
IN the so-called Tightening of the