Mohave County miner and our mineral wealth., 1922-06-16
[QABSUN, statistician tiiaGcl ID on Business Conditions

1922. Roger w. Babson issues the following statement today regarding the Money Situation:
 "For the past few years \. banks, mortgage companies. and. others en- gagged in the loaning of money have been educating people to pay high rates of interest. Manufacturers, bus mess men, home builders and others are today paying high rates of inter- est which a few years ago they be- lieyed never would be paid. Naturally this has handicapped employment, es- pecially building operations. These people now wonder whether this is to be permanent condition or whether these high rates are only temporary. Statistics lead me to believe that the high money rate period of the past few years has passed for many years to come. Already money rates have declined greatly in the wholesale mar ket. Where-a year ago-the banks were leaning money on call to the brokerage houses at from six to eight per cent they are now loaning at about four per cent. Even three to six months paper can be sold at from Az % to AZ % discount. These are tremendous changes within a short period of time. In fact the change is so great Ga decline of about 509o) that it would not be surprising if money rates now strengthened for a short while preparatory to another down. ward movement.
 Money is commodity the same as cotton, wool, lumber, or copper. It has a wholesale market and a retail market. A wholesale price and a re- tail price. Moreover, as with com. modities, the retail price in the money market lags, about six months to a year, behind the wholesale price of the money market. This means that the rates in the wholesale money mar ket go up and down from six months to year before the average business man and home builder is affected. It takes nearly year for cotton to get from the plantation to the shelves of the department store. Hence, it may be several months before the retail cotton goods trade gets the advantage of a decline in the price of raw cotton. It is the same with money as with cot ton. It is some months after the de- cline in the wholesale price of money before the business man and the home builder get the advantage in the de- cline of rates. The bankers are not to blame for this. It is the retail inter- est rate for money after the wholesale rate advances, so it takes a consider able time for the retail rate to decline after the wholesale rate declines"
 Being asked how this is to effect the average man during the next year MT. Babson replied as follows:
 This means that the average man will be able to borrow money much l cheaper during the next few years than he has been able to borrow dur ing the past five years. It means that borrowers should now avoid borrowing for long terms at high rates. It means that there will be decline in the re- tail price of money the same as there has been a decline in the wholesale price of money.
 It means that money will be more available for the building of homes, school-houses, roads and construction work for every form. Most of all it means:: As the banks during the past few years have educated the public to high rates, the public must during the next few years educate themselves back again to the lower rates of some few years ago."
 General Business as reflected in the Babsonchart is running 15qo below normal-an increase of 1@ over last week. It is holding we'll in face of the bearish factors resulting from the railroad ruling.
 Mammoth Cave, of Kentucky, may be sold under the hammer. The 5000 acres at the entrance to Mammoth