The Birmingham age-herald., 1921-04-14
MONEY WITHDRAWN FROM BANKS OF EAST
 BY INLAND BANKERS
Low Rate of Interest Cause. Tax on Sales Seems to Meet With Favor In
 Country
By HOLLAND

New York. April S-(Specal) )-Why should funds in large amounts have been sent by the so-called interior banks to New York if it be true that farmers and others in the outlying districts are in great embarrassment because of their in- ability to secure loans with which to carry their crops and also to finance their business? Yet we had last week an interesting and highly suggestive move ment of money from the interior to New York. There was so much of 1t that although the charge for the use of it was the lowest that had been quoted for a long time, nevertheless there remained some S9.000,000 in the custody of the banks for which there was no demand.
 It was, however, not unusual auto matic or reflex action which took place on the following day. The New York banks were supplied with funds in vast amount, much of which was sent to this city from other parts of the country. Presumably it was sent here so that it might be loaned out upon call at rate which would furnish fair profit. But because of the plentifulriess of these funds, and the very light demand for them not even rate as low as 4ls, or III oOilt IdStb per Ctllt,f was OI dNdlI in loaning these funds.
 On the other hand the banks in other parts of the country which have been sending large amounts of surplus funds to New York became alarmed or dissat- isfied because the rate charged for the use of money was so low. Therefore, they began instantly to withdraw these funds. Presumably they expected to get better returns for the use of the money in other ways. As a result of these with drawals the local rates for use of money were ae once increased. At first per cent was asked, and then 51s and at last as much as 61s per cent.
 One reason, perhaps for the light de- mand for call money is to be found in the fact that the brokers are now doing very small business. If any of them is able to-. place 10-share lots, this is regarded as satisfactory.f Some of the brokers are in the blues. While there is good deal of trading in the security market. it is chiefly confined to those who make a business of trading among themselves. The public is staying out although the unusually low quotations for many lines of securities whose in- trinsic value is beyond question would ket.
 THE QUESTION OF TAXES
 canvass of the entire country which was recently made by Baltimore insti- tuition brought forth an almost unani- nous statement that the chief matters of importance that should be speedily de- termined are the taxes and wage reduc- tions. All who replied to the inquiries spoke in approval of the proposition that tax on sales of commodities be imposed because this would probably make pos sible very great reduction in some of the present tax rates. Apparently the feeling of the country is in. favor of the so- called sales tax proposition, although reports come from Washington that Il considerable number of the members of Congress do not look with favor upon the proposition.
 Public sentiment, however. seem to be unanimous in favor of the repeal of the excess profits tax. That is now recog- nized to have been one of the grievous mistakes in the present tax law. It has been spoken of as placing the dead hand upon business. In Great Britain a tax of this kind was found to be so harmful to business that it is the purpose to elim- mate 1t from the tax list.
 FUNDING THE DEBT
 In the consideration of the question. of the taxes which Congress will levy at it's next session, there is sinvoIved the fund.- ing of war debts, much of floating and the Victory and Lib erty loan bonds. One issue of these bonds must be taken care of through, legislation enacted in the present session of Congress because the time limit which these bonds carry expires before the end of the life of the new Congress. It is recognized that it will be impossible to redeem these bonds. To do that it would call for several billion dollars. Therefore, it is inevitable that they be funded. and if this be done in the case of one of the issues it may be deemed expedient to fund all issues. Tn the finan- cial district the suggestion is frequently made that these bonds be funded with a life of not less than 36 years. and pos- sibly as long life as 30 If they were funded at per cent with 1 per cent added for sinking fund purposes, the bonds would be liquate in about 36 years. So. also. it isl said that if action of this kind was taken the vast number whv hold Liberty and Victory bonds in small amounts would rejoice at the oppor-.