The Birmingham age-herald., 1920-10-18
EFFECT NOTICEABLE


 The effect of these rates is seen when the general managers or executives Of railroads or other large corporations visit New York to raise money neces- sary for the redemption of retiring loans or for the extension and promotion .ot new business The bankers and bond houses solemnly point to the high rates paid for call money and corporations whose credit abundantly justified a 5 or i6 per cent interest basis have been forced to pay or or 10 per cent on loans for one year, three years or five to ten years; and are sometimes persuaded by the bankers through whom they obtain the funds that they are doing we'll to get money even on such terms, because money on call has been advanced often artificially to 12 per cent or 15 per cent or 20 per cent for few days at time.
 The same cause that cripples and hampers a great railroad system a municipal government also deprives and injures or ruins a country storekeeper, a small farmer or the owner of large or little manufacturing enterprise.
 ''The high rates on call money in New York have thus shut off large part of the investment demand for securities, which, during the past twelve months, largely because of these disturbing con ditions, have been forced down to the lowest prices reached in forty years.
 Tt is my belief that if the call money rates in New York had been maintained at per cent or at the maximum rates which are charged in other money cen- ters, as 1 believe could have been done with reasonable degree of cooperation upon the part of the New York banks, the unprecedented shrinkage in security prices in the past twelve months would not have taken place and the apparent loss of billions of dollars in values would have been avoided"
 UP TO 30 PER CENT
 Sworn reports to his office, MT. Wil- Hams said, showed that more than 4,ooo leans had been made by the New York banks between October l. 1919, and Au- gust 1, 1920, at rates of 15, 20, 25 and 90 per cent" In three of the largest banks loans made at those rates and between those dates aggregate more than $S0OOOO,- 900, he said. The figures, he added, rep resent only the loans made by the banks for their own account and not for their correspondent banks. 1 The records also show," MT. Will 1 Hams declared .%hat the total loans out standing upof which interest at 15 to 50 per cent was 3ging eh@rged by portion l of these bans on fortg-two different days, for wi -h reuorts' were received from theb, agt egating over $1,1oooOo,Ooo. The record also show bat the amounts | of loans made unflDa aie same periou at rates in excess Of 10 per ceat and up to,
 but not including. IS sSr cent amounted to over s1, 400 GOO, 9D. there being over n,OO0 I of such loans.
 1 in addition to the asave the aggregate
 of the loans upon waich a purtion of the
 banks reported that tbey were charging,
 on eighty-one different days interest in
 excess of 10 per cent ard up to. but not including, 15 per csnf. was about $90O.ooo,- | 0O0. The brokers or street. loans upon which the New York banks turing the iperiod referred to, were charging more lthan per cent per annum and up to lO
 per cent, reach in the aggregate some bii- l lions of dollars in additional anolnts and | tens of thousands il number.
 l Remedy for the situation, Mir. Williams
 saw only the hope that public sentiment will be strong enough to bring al'out re-
 forms" and expressed tho beiieI that the tremendous responsib lties of the New York bankers and fnanciers would sooner or later be realized by those who carry those responsibilities He said thai | "some of them honestly and conscien-
 tiously" observe the obligations to the | general public now and that they real iza the "direct and distinct duties which 1 they owe to all communities.