Great Falls daily tribune., 1920-04-08
on either side. The presidential campaign has
been a little quiet so far especially on the Demo-
cratic side, but the warriors are waking up.
THE RISING WAGE OF MONEY.

On April 6 the New York market dispatches
quote prime mercantile paper at 634 to per
cent It is the highest rate we have seen for
many years if we except a few short periods OF
extreme stringency in the money market.
few years ago the quotation ranged between 4M
and per cent. It means just this: That tlrms'
of unquestioned financial stability, who desire
to use money for a period of not more than six
months have to pay between 634 and per cent
per annum to borrow it on short time notes.
The same advance in interest rates is now noted
in the bond market A dozen years or so ago
the city of Boston floated at par an issue of
school bonds which bore A per cent interest.
Many states secured money on their bonds at
that rate of interest and sometimes got pre-
MUM besides. Our recollection is that about
that time the city of Bozeman in this state re-
funded bond issue at Az per cent interest.
Lately cities and counties have generally found
that 5 per cent bonds are unsaleable, and we
have noted that in at least one case per cent
county road bonds failed to find bidder,
though afterwards disposed of at par to local
applicants.
Uncle Sam put over his last short time liber-
ty loan known as the Victory loan at 4$ per
cent interest, but they are quoted now on the
market at discount It is rather doubtful If
new issue of any considerable extent could be
sold at par for per cent. The wages of money
have gone up for Uncle Sam for everyone
else The only class in the community that can
get cheap money is the farmer who can bor-
row through the federal loan banks on per
cent or 512 per cent basis. But that is only pos
sible because the capitalist who furnishes the
money is exempted by law from all state and
federal taxes on his investment bonds, issued
for this purpose. AS result the farmer who
can give mortgage on his farm can borrow
money cheaper than the beef packers or the
steel trust can borrow it on long time or short
time either. That is one of the achievements
of the Wilson administration and recent demo-
cratic congress by the way, which we find treat
ed with dense silence by our Republican brether-
en-.
But when we measure current rates OF inter-
est by the decreasing purchasing power OF
money it appears that the increased interest
rates are modest enough. In fact the per
cent we pay the owner Of capital now as wage
for the use of his money will buy no more than
3lb or per cent would have bought before
the war, so that the increased interest rates
are really no increase at all when viewed from
the purchasing power of money point of view.
The wages of money has been the slowest neces-
sity of life to advance in price. We all need the
service of borrowed capital from time to time
Before the war we paid our local bank 8 per
cent per annum for it's use. We still pay them
8 per cent per annum for it's use though it's real
value has decreased to the banker. He cannot
buy so much service of clerks rent, Stationery,
or other things needed to conduct bank with
So for the use Of 500 year as he could do
five years ago, but the price remains the same.
How long it will do so is problematcal for rising
cost of money in the east is bound to reflect on
the rate for the useage of money in the west.
Seven per cent money for prime commercial pa
per in the east is better rate for the service
of money than per cent in states like Montana
for the ordinary commercial loans. The SER
vice rendered is different when comparing east
ern and western bank service. The wage of
money for service rendered is controlled by the
necessities It is fixed by the law of supply and
demand. The demand for capital to repair the
waste of war in the world is very great and ex-
ceeds the supply, so that we expect rising in
terest rates for some time to come. To increase
the supply we must produce more and consume
less and so increase the capital supply by saw
inqs. There is no sign that such program is
being very rapidly adopted in the world
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