Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1920-10-18

and solvent corporation is trans
parent. but many. excellent corpora
lions have. during the past twelve
months. been forced to accept loans
at ieNorbitant rates OF interest for
terms of years which will inevitably,
III some cases prove u serious embar-
rassmcnt and handicap I'm their fu-
ture operations.
The same cause that cripples and
hampers a great railroad system or
municipal government also de-
prives and Injuries or ruins coun-
the owner OF a large or little manu-
featuring enterprise.
Scouts Panic Argument.
Tho argument that these high
money rates prevent panics by en-
tioinE call money from banks and
Will not bear analysis. The facts
arc that much Of the money drawn
from the interior and loaned on
can In New York at fancy rates
nigh rates and the fear which they
instill as to tho future of tho Sc
curity market. DO used by investors
and banks and corporations who have
those idle funds in the purchase OF
standard railroad and other bonds:
which would thus furnish funds to
the New York market normally and
naturally.
'rhe high rates for call money in
New York have thus shut Off IL larg @
part of the Investment demand for
securities, which. during the past
Twelve months. largely because OF
these disturbing conditions, have
been forced down to the lowest prices
reached in forty years.
1t Is my belief that IL tho call
money rates In Now York had been
maintained at 9 per cent. or at the
maximum rates which arc charged In
other money centcrs, as / believe
could have been done with reus-
onablo degree OF cooperation upon
tho part OF tho 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
MY hope for the present is that,
with the public In possession OF tho
facts. sentiment Will be strong enough
10 bring about reforms. Money
rates should not be raised or low
cred or manipulated arbitrarily or in
secret. New York bankers and ilnan-
clcrs haH" tremendous responsibilities
&c the general public and all can he
induced TO realize and respect them
as some honestly and conscientIous-
~ do now. Bankers throughout the
country should have impressed upon
them that they owe direct and dis
tinct duties to their customers and
communities, In preference TO earn
ing excessive and questionable prcfits
TOT stockholders, and themselves by
pouring money into New York for
interest eAactions which inevitably
most injnrc or destroy somebody
The best banking Is the broadcast and
most forcsecing-that based on the
conviction that the real. permanent,
stable profit in business Is in build
Ing up. encouraging and developing
IN their respective spheres. not In
starving the productive elements or
communities in the hope OF grabbing
large profits from the speculative.
REPORTS shOwiAS tho extent to
which. as referred 10 in my state
ment of July 3lst. banks In New,
York city and elsewhere have. dur
ing tho past year. been obtaining
funds from the Federal reserve banks
at rates varying from Az to per
cent and have loaned these funds in
New York At the excessive rates re-
ferred -, running. In some instances.
as high AZ 20 per cent, 25 per cent
and 80 per cent, arc now being com
piled. A statement concerning these
transactions will DO made later"