The Bridgeport times and evening farmer., 1918-03-13
The World Of Finance
THE MONEY MARKET.

The money market has shown but | little change during the last month. l Time loans are on a. per cent. basis | although a few are made at 5%. The large banks are out of the conner cial paper market, but a considerable l volume of paper is handled the coun- | -ry, ever. The call rate in this city h.-J ranged from 8 to per cent. and been nearer the latter figure most of the time. There is no reason in sight for expecting any important change, for the reserve banks can undoubt- edly take care of any necessary de- mands and the governments necessi- ties will prevent any general relaxa- ton. Banks are conservative and making commitments only as they are under obligations to take care of necessary business.
 Some disposition is manifest to raise interest rates on deposits for the pur- pose of attracting deposits, and the situation raises anew the old question whether a sliding scale on deposits, automatically related to Federal re- serve rates, or some other standard, would not be better than the flat rate, but there is little reason to believe that a sliding scale with tEe general agreement necessary to sustain 1t could be made permanent in this country. There is a competitive situ- ation not only as between banks of the same city but as between the banks of many cities, and the present does not seem to be good time for disturbing the adjustment of rates which has been reached in the past. At present loaning rates are compara- lively high, but this is following sev- eral years when tl-Gy have been low, and it is probable that other years of low rates will follow the present situ- ation. At this time it seems desirable that every tendency to imitation and to abnormal conditions should be avoided so far as possible. An in- crease of deposit rates if adopted generally in the centers will surely extend into all localities, and raise the general level of costs upon which the banking business is conducted. That in turn will increase the anxiety for earnings. and have an unfavorable effect upon the situation in many ways. The banks are carrying num- erous subscribers to the government loans Sf low rates, and if deposits cost more these loans will naturally come higher or be discouraged. The government is the largest borrower at this time and if the cost of money is raised it will be inevitably suffer. It would be unfortunate to have a gen eral withdrawal of deposits from the banks for investment in the govern ment loans, but on the other hand it is not desirable to have rates upon deposits which will tend to keep new capital from going into the loans. It is a very inopportune time for the banks to enter into a competitive struggle for deposits. The effect would be greatly to aggravate and extend the evils already resulting from the competitive struggle over labor and raw materials.
 The Federal Reserve Board has given out statement expressing it's concern over the movement, and giv- ing cogent reasons for it's disapproval. This prompt and appropriate action is likely to be generally accepted as con- elusive upon the subject.
 The volume of bank loans tends upward and this is not entirely ac- counted for by the purchases of Treasury certificates. The reports of member banks to the Federal Reserve Board show that aside from loans upon or investments in United States securities, loans and investments on February 15 aggregated SIC, 0,026,S ,S1S,- 900, against 9,S62, 400 900 on Febru- ary 8. These figures were for 670 banks on the latter date and 679 on the former. It is not a satisfactory showing, with a government loan looming up in the near future, and doubtless the trying business condi- tions of the last three months are in large degree responsible. There is still a great amount of farm produce to be marketed, particularly in the middle West, where the railways have been unable to move it as promptly as usual and the amount of soft corn has caused the farmers to fatten more live stock and feed it longer than is customary There is reason to expect a great 1oosening up in that quarter in the next few months.
 Railway traffic conditions have greatly improved in the last month and business reports, are good from all quarters. Retail sales are large and merchants have more trouble getting goods than in disposing o1 them. Price reduction sales since the first of the year have been smaller than usual, merchants holding that il is better to carry stock over than tC
 run the risk of not being able to re
 place it