The public ledger. [volume] (Maysville, Ky.) 1913-1968, 1920-11-22
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o MONEY AND BARKRrs. Q
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Credit Situation.

The country's credit requirements
have, during the period under review,
reached q maximum level. Pressure
may for time continue at this cur
rent high level but no substantial in
crease Is anticipated in the demand
for banking accommodations, either
for crop financing or to meet CONNER
cial and Industrial requirements. The
credit position is essentially sound
and the future is to be regarded with
confidence.
The banks and reserve institutions
have financed the enormous volume of
current requirements with no weak
ening of their reserve strength. The
beginning of a reduction In the aggre-
gate Of these requirements is now evil
dent. Loans of reporting member
banks of the reserve system expanded
steadily until the middle of October. A
moderate contractio mis- now shown.
Interior banks in diverse sections of
the country are moderately increasing
the colume of their purchases of COM
mercial paper, a nevidence of the re-
lease of funds from other employ
ments. They have also begun, in a
small way, to reduce their borrow
ings with other banks. Such contrac-
ton as has occurred is not of large
volume, 1t is important, however, be-
cause, In the present difficult situa-
ton, 1t indicates an ability greater
than might have been anticipated, on
the part of both the interior banks
and their customers to liquidate out
standing obligations. 1t indicates also
that the future trend will be toward
the contraction rather than expansion
of such obligations.
Money Rates.
Open markeet rates on commercial
loans have continued unchanged on
an s per cent. level, with country
banks purchasing paper in fair vol
ume. Call money was tight, ruling
throughout most of the period at
from 9 to 10 per cent, but easing at
the close to per cent. The continu-
ing high rates in the call money mar
ket reflected the general stringency of
credit rather than the requirements
OF the stock market, where sharp
liquidation continued throughout the
period. Both demands for and Offer
ings Of time loans on securities were
nominanl. Moderate offerings of time
money may reasonably be expected
shortly ,as funds are released from
other uses. This would result in low
er quotations. Prime bank acceptances
were In active demand and in reduced
supply.
UenerhI COnd1tlOnS.
The determining factor in the en-
tire situation continues to be the re-
luctance Of consumers to buy, partly
because OF their expectation that
prices may 60 even lower, and in part
because of the curtailment of pur-
chasing power of large sections of the
buying public. Farmers are no, pur-
chasing activel vat present because
prices Of the products which they
have to offer in exchange have de-
clined sharply. Wage earners hesitate
to purchase because their earnings
al being curtailed by increasing I'M
and In some cases BY re-
duction in wages.
The adjustment of prices to new
conditions Of supply and demand has
proved difficult Two factors on the
buying side OF the equation offer much |
however In COMPARE
son with those classes whose income
increased rapidly during the period of |
rising prices, the decline in prices
which has already taken place has In