davidaulloa/AmericanStories huggingface dataset:
New-York tribune., 1922-06-18
Chief Factor Is Great Supply
Because of Slackening
Requests for Gre d it's
Shown in Trade Quarters
Treasury Bills Decrease
Corporations Are Turning
to Financing Through
Sale of Commercial Paper

HISCREDITED as measure
of fundamental credit condi-
- tions and consigned by many
authorities on economics and finance
TO minor position in the field OF
money and banking. the Stock Ex-
change call loan market has over
recent months and more particularly
since the start Of the year furnished
employment for funds that would
otherwise have found no use con-
forming TO the requirement Of
liauidity. and has provided for
banking institutions scattered all
over the country that narrow mar
gin Of earning power that means
profitable business.
In ono respect the experience has
been paradoxical. Beginning last fall
the demand FOR speculative accommo-
dations. including time loans. as we'll
as money on call, has been on a stead
ily ascending scale. Under normal con-
d.tiors. with other borrowers pressing
for funds. this would have meant ris-
ing charges for loans Of this character,
bat the credit needs OF other classes
have been slackcning and the growing
absorption Of funds by Wall Street has
not been sufficient in itself TO support
the more usual movement Of rates.
Instead brokers loans have climbed
gradually back toward their peak and
to-day the interest paid on loans 20
finance speculative operations is lower
than since pre-war days.
Exact information Hs 70 the aggre-
gate Of street or brokers loans is not
available. The money broker has per-
haps the best perspective Of the situa-
ton. hut even his knowledge is founded
on only a section Of the market The
individual banker knows the figures
for his institution and has probably
heard the facts regarding the loan
position Of several others. 1t is signi-
fcant that both agree that street loans
to-day are not far below the record
total reached during the bull market
which eliminated late in 1919.
New-York tribune., 1922-06-18
Wall Street Loans Now Not
Far Below the Record
Total Reached i'm the
Bull Market Late i'm 1917
Influx From Interior
Bankers Feel They Must
Keen Assets Liquid for
Coming Business Revival

for surplus funds. but in view OF the
current limitations OF other employ
ments and tho readiness with which
money is put into or taken out OF the
market the adjustment 20 satisiac-
tory basis is usually quickly accom- =
plishod. The experience Of the last
week is illustrative OF this fact From
all over the country funds were drawn
20 this center in anticipation or the
June IS payments. The concentration
was large. because IL is AZ New YORK
that more taxes arc paid, more govern
ment securities and coupons presented
for payment, than anywhere else IN the
country. Some employment for this
money had 20 be found. and the call
money market was the first recourse.
As a result the rate worked down 20 az
low as 2i5 per cent. but following TINS
funds were diverted 20 other fields
where profit offered. even az a sacrifice
Of some liquidity, and the rate hrmed
up again. going as high rs per cent.
l. IS the liquidity OF the call loan
as an employment for funds which Is
one Of lis most valuable features and
which has contributed an important
element OF service 20 the country in
recent months. The overhead Of bank
ing institutions, despite every effort az
curtailmcnt. has remained higher than
before the war. This has been true Of
salaries and wages, the materials used
and practically all other items.
Further. the increase in interest paid
on deposits during the imitation period,
when banks were competing against
each other for money, has resisted
D. p fff Hfff HU
last week that the New York Clearing
House has taken action In the matter,
adopting a reduction that will save 20
bankers one-haf of per cent on
hundreds Of millions Of dollars. The
swollen costs Of operating a bank have
tempted financial executives 10 place
their funds where they could secure 4
reasonable profit. This has been
available In the bond market, where
interest returns. despite the extent Of
the advance in prices, have continued
attractive 10 the financial institutions
OF the country
Bonds. strictly speaking, are limited
as 90 liquidity from the banking stand
POINT IL is an established banking
practice 20 keep a certain proportion
Of funds In investments Of mis- char
actcr. but the tendency has been, and
90 some extent still is. 20 overdevelop
,his side Of the business. The reduc-
tion in interest paid on deposits will
moderate the temptation. but Of even
more Importance in checking the trend
has been the market for money in Wall
Street. where the demand has risen
substantially as the demand from
other users OF credit has declined.
New-York tribune., 1922-06-18
Again Rising

To indicate the rise and fall Of
brokers' loans and their latest upward
swing estimates from these quarters.
at best an approximation rather than
precise. arc useful The total late in
1919 is believed 70 have reached a
point not far from $1,000 100000. Then
rs stock prices broke and the cost Of
carrying stocks declined in proportion.
the needs OF the street contracted and
tho aggregate fell almost to $1,000
600 600. This level was reached early
N 1921. and for several months. as the
stock market hung listless, there was
little change. With the approach OF
fan the market came TO life and, due
% accompanying expansion OF require
morts. loans have risen again to ST.
COO coo 900 or more.
The testimony Of banking executives
offers a little more concrete evidence.
One institution that is q large lender
in the Street reports the following ex-
pcg.encc: Using 100 as the 1919 high
mark. ITS loans declined during the dull
pc~iod 20 % and are now back 10
around 81. The official Of another bank.
without citing figures, declared Us
loans were close to, II not at, the maxi
mum.
There is support for the conclusions
of tho financial district as 70 the loan
position in the official records, which
deserve citation for the weight they
carry. although their completeness and
the Justification for their comparative
use arc not fully established The
total loans on stocks and bonds. other
than United States government securi-
ties. reported by New York City banks
making weekly returns 70 the Federal
Reserve Bank stood. on October 81,
1919. q date roughly approXimating the
peak Of that bull market, az si.455,6i7,-
600 On December 26 Of that year
these loans had shrunk TO si34S,0s3,-
New-York tribune., 1922-06-18
Returned to Otcners

OF the post.arm.stice period little
need be said The railroads were re-
turned 90 their private owners. On .
peace basis once more they soon re-
vcrted 20 their ancient policy OF isola-
tion-and this 40 q tImc when hnan-
cial cooperation was necessary 90
maintain any sort of an equilibrium.
Such o spirit could have bat one To-
sul,; tho general dcfcit rose from
l7e4 million francs in 1915 10 1.2ll1
million in 1919. while FOR 1920 alone q
was 2.791 million francs. or llttle
less than half o.. the deficit for the
previous seven years together l6.G63
million francs). Add to shat the grow
ing discomfort among thoroughly
disgusted personnel, manifcstirg itself
iu the great strikes Of 1919 and 1920
q harassing press campaign for radical
reorganization, and the beginnings Of
definite rctormative projects. and we
have in sum the modern tendencies.
With the cessation of hostliitics. the
railroad situation came in for o great
deal Of attention. Labor. emerging
from the war Ia o reinforced position,
appreciated its golden opportunity 20
press for ameliorative reforms The
powerful Confederation Generate du
Travail. the French general federation
o. trade unions, appointed an economic
council 20 study the existing evils ard
II possible evolve some concrete plan
FOR tho future.
Publcists Of the stamp of secretary
Jouhaux ~ tho G. G. T.. Edgar Nil
baud. Maxine Leroy and Marcel Bide-
laray. secretary general % the rail-
road workers federation, and th- big
gun Of the railway operatives. sct up
q veritabio barrace Of criticism in
French radical organs. Tho momertary
successes of the new Soviet Industrial
ism oncendcrcd wild schemes for
worker control" Naturalization Of
industry became the slogan o. the
French laboror. Il was q famous So
cialist. however, who first crystalilz zcd
the industrialist point of view 2 q def
mite project Of reform.
In April, 1919, VI. Albert Thomas. So
c.alst deputy, presented in the Chan
of Deputies "a bin for the nationaiiza-
ton of the railroads in the general in-
tcrest' The elaborate argument was
a stirring arraigumont OF The existing
system
u. Thomas proposed 70 realize na-
tOnalisation by invoking the proce-
dure for purchase Of the railroad. as
ervisaged IN the conventions Of 1883.
The state would thus pay annuitias 20
the private roads until the cxrira-
tlon Of their concessions. The basis Of
this annuity would be tho average net
receipts earned by the railroads in the
| seven years Immediately preceding the
Z purchase. The private owners would
also be compensated for new lines con-
/ structcd during the fifteen years be-
fore the purchase. while tho "cuaran-
tee Of interest owned By the railroads
would be paid by the rolling stock
taken up. Finally. there was provision
+ for a liberal system Of administrative
control under parliamentary supcrvi-
sion. In which the personnel and the
+ general public would play prominent
4 parts.
New-York tribune., 1922-06-18
Italy Would Refund Short Debt
Measure Before Parliament Proposes Substitution
of Nne.Year Bills, on Lottery Basis, for
One.Year Certificates

needed to complete the works s'1 .
course OF construction. but wnien w,
abandoned 20 carry out more neee'''T
construction. 49,
Negotiations for financing ~.
works BY American or English or. ~.
have already BEGUN. but two diinss'ss, s.,.
are now standing In the way' hfs'' ~ ~
eign hnanciers want 20 negouaN
one large company, and not WYE
small ones. and. second. they osIiss
as guarantees. mortgages on tne >.i
and participation IN the "''N-
management. .,,1
Italian industrial men are pfegs,..'
10 accept the frs. condition BY -
ing a syndicate; but they wan' ~
tain an autonomous technical sk IN
istration. They point out tnat
foreign capitalist has faith IN ins
dustry there is no need Of sendlas
technical experts 20 Italy 20 tase
in the management. that tne s
can easily be purchased IN Londos
New York, and that the position y
industry can he followed by oos'''
stock exchange quotations.
New-York tribune., 1922-06-18
Commercial Loans

To understand why rates have de-
elined as demand has risen. It is nee
egsAry 20 consider what has happened
in other money markets and the de-
creasing demand from other quarters
than the Street upon the banks. Tae
FIRST item 20 consider IL the general
classification OF commercial loans. be-
cause II IS 20 the support of commerce
and industry that the mnjor part OF
the country's banking resources are
normally devoted. This class Of loans.
o. reported by New York City banks.
the experience being typical because
the banks here do much OF the busi-
ness OF the country. has dropped from
peak Of S4,l54,000,O00 attained on
October 6. 1920, 20 s2,7s4,0oo.o 900 By
the middle OF May. according TO the
New York Federal Reserve Bank.
There has been n tendency on the
part Of many corporations to finance
through the sale Of commercial paper
rather than by borrowing from their
banks. This has proved cheaper be-
cause Of the Willingness OF paper brok-
ers TO shade rates and split commits
sions in some instances and also be-
cause banking institutions have not
seen III TO revise downward their rates
to customers as sharply as open mar
ket rates have declined. To complete
this part OF the picture, reference TO
the volume Of commercial paper IL
essential.
A might have been expected. there
has been some increase in volume OF
com mereiGl paper outstanding. The
New York Federal Reserve Bank re-
eeives and publishes statistics based
upon reports from twenty-nine dealers
From high Of approximately 81 300,-
600 900 early in 1920. the volume Of pa
per outstanding contracted to about
500 100000 early this year. and has
since recovered 20 around Ssoo.ooo,o0o.
The increase has not been eommensu-
rate with the enlarged opportunities
for putting out funds 70 aid stock
speculation and is relatively unim-
portant as compared with the decline in
direct commercial loans
Opportunities for employment OF
funds in the nther principal money
markets-the discount market and the
New-York tribune., 1922-06-18

group was introduced in Parliament
hardly before the bad feeling engen-
dered by the Loucheur proioct had de-
parted. The new proposal comprised
the plan outlined By the economic
council Of the c. G. T. The labor
group had fused with the industrial
wing Of the Socialist party and had
intrusted Leon Blum. famous radical
editor. with the duty Of expounding
the doctrine Of naturalization before
the deputies. VI. Blum harangued the
chamber for three days on the advan-
tages Of tho project. but 20 no avail.
II was violently opposed BY the same
element that had successfully sup
pressed the Loucheur scheme. When
put 20 a vote on August .. the bill was
decisively rejected BY 435 10 llq.
The defeat of the Blum program
apparently sounded the death knell. for
the time being az least. Of the move
ment for railway nationa li3ation in
France. The powerful labor and noli-
tical organizations which had SUP
ported 1t now saw the fallacv Of main
tanning costly propaganda for n
cause whose chances Of success we're
so meager. They preferred rather 20
take their chances on the government
scheme FOR reorganization, which was
sure 20 be adopted. The press re-
joiced that France had been saved
from a "syndicalist octopus calculated
10 undermine our economic structure
by the application of Bolshevism 20 the
railroads" II WAS pointed out that
the adoption Of either plan would have
committed the nation to a system like
that in England. where "all lines arc
under the complete control of the
state. Tho service ia in every respect
worse than II was before the war and
the charges, in most cases. greater:
yet instead OF covering costs. IL shows
a keav., degrf.
New-York tribune., 1922-06-18
Pay of Reserre Loans

During the early stages Of the rising
lido 81 demand for speculative accom-
modatious borrowers OF this class had
20 compete with the desire Of member
banks 20 pay OF their loans at the
Federal Reserve banks. Until the
opening OF the year. when the usual
disbursements and readjustmcnts pu'
tho banks IN funds, rates FOR cal.
money held pretty consistently go IA.
5 and even 6 per cent. Then came a
temporary easement. which terminated
as the banks cleared up their position
az the central institution SO long a.
they were substantial borrowers ~ tho
Reserve Bank. where the rate was "a
per cent. they could not afford 20 lend
in the street az below that figure
Money brokers report that before the
turn of the year IL was difficult 20
obtain funds for their customers, and
that since the first Of the ycar con-
ditions have been altogether different.
That is the reason.
Since loans ~ the Reserve banks
have been largely paid officially, the
last statement showed total borrowing
BY members az less than S70000.000
and for the system at not much more
than 100000 900. the latter total COM
prising largely slow liQuidating agri-
cultural credits that cannot in any
event be Immediately wiped out the
Stock Exchange money market has
served as an important back log not
only FOR Wall Streets banks. bu. foT
banks all over the country. The money
which Wall Street uses is not New
York money alone, but the money Of
the nation.
I'VE are putting out on call much
less for ourselves than for our cor
respondents in the interior" said the
loan executive OF n leading national
bank recently. "Thc bank in Chicago
or San Francisco, owing 10 the mechan-
ism supplied by tho Federal Reserve
system. can lend as freely here as
though il were located in the Street.
The out-of-town institution used 20 be
hampere,. in making Wall Street loans.
but this is not so now. 4 bank In Chi
eago with $4,000. 900 for which it seeks
temporary employment can transfer II
here in FIVE minutes and have Il placed
in the Street and withdrawal OF It's
funds is accomplished with equal IA
cility."
There Is no way Of telling the pro-
portion Of brokers' loans which repre-
sents New York money or out-of-town
funds, but in the call loan market the
latter occupy a very important place.
Time loans, on the other hand. are
made mostly by the Wall Street banks
for their own account.
New-York tribune., 1922-06-18
EXTERNAL DEBT

Treasury certificate market have also
tapered OF. A survey by the Ameri-
can Acceptance Council shows the vol.
umc Of bankers bills outstanding as
only sfi6.422.ils as Of April 1, against
S66f. .092.ll3 and S790.00l .237 on the
corresponding dates Of 1921 and 1920.
respectively. The aggregate in the pre-
ceding year had been a. high a.
81 900. 100000. Bankers and bill dealers
doubt that bankers acceptanccs out
standing have shown much increase
over the last two months. so that the
decline from the maximum has been
almost so per cent. The vslumc of
Treasury certificates and notes out
standing has been gradually bnt stead
ily dwindling. a. the Treasury has car
ried out It's plans ior rcpayng and
funding the government war debt.
New-York tribune., 1922-06-18
Videspread Discomfort

That there was widespread diseon-
tcrt with the existing system on the
eve of the war IS patent.
Then came the world conflict, and
with 10 the stupendous task Of repelling
the invader When the war began, Ger
MANY had decided advantages IN the
extent of lines. the number Of locomo-
tves. the quality Of fuel and the cali.
her OF her personnel. In 1911, General
pernhar4i estimated that in the event
of conflict. Germany could mass her
troops on the frontier three DAYS faster
than France.
Tho private roads nobly responded TO
the call % arms. 4 spirit OF co-opcra-
tion supplanted the particularist pre-
var attitude: all hands tried 70 ameli-
o~ato the service under military con-
troll Bu. the existing system was FAR
from perfect and under the strain o.
emergency gaping holes began n show
-. Railway men still speak of those
>ruciai two DAYS during the siege or
Verdur when the railroads had 20 he
yunplanted BY an improvised service
OF motor trucks. The road IN charge
of that region was officially censured
hvthe War Department some time later
for its ineficioncy on the occasion. Ine
o-rrations on the Marne were also con-
si5orahly retarded by transport crisis,
such as a road well equipped and well
managed would never have experienced.
The state soon realized that 70 con-
fnuc the policy of laisser faire
would cause decay Of the transport
service. By several measures hastily
iriYrovised from time 10 time. - strove
20 Drop Up the tottering system. The
concessions ~ the companies of the
,soUh ara tno Psris-Lyons- Mediter-
raresn were cxiefded. The Treasury
agreed % assume 10 per cent Of the
New-York tribune., 1922-06-18

Special Foreig~ Financial CoYrespoadcrcs
ROME. May 27.-The national short
term debt on April IS amounted TO 33,-
000. 900 900 lire. the greater part Of
which (26.00o. 900 900 900 lire) was in
one-year bills. The government was
troubled by the difficulty OF redeemng
these constantly maturing bills on
short notice and by the consequent rise
in note circulation, and therefore has
not only suspended further ISSUANCE
for the funding Of these short-tcrm
obligations into nine-year bills on a
lottery basis. Although the interest
rate and prizes involved in this pro-
posed operation are yet unknown. this
measure has been accepted by the
stock exchanges as sign Of wise
financial policy
On the other hand, there is consid-
cradle complaint that government eS-
penses are not being cut sufficiently
rapidly and that too much time is be-
ing wasted in arguments regarding
war expenditures. The alleged inefi-
cheney of state employees is being
sharply criticized. Only recently the
commission sent 10 the United States
W HNiNhaoN okilAhAAhldl IldNNlUtil
during the war has been the subject Of
an inquiry. This machinery has not
proved successful in Italy, due prob
ably to the difference in soil condi-
tions. The commission bought 6.296
tractors, b,006 plows and 500 miseel-
lancous implements valued at about
Sl0.000,000.
The government delegates point out
that they were charged with the pur-
chase OF certain goods and that the
types Of machines as well as prices
were fixed by the American govern
ment.
Because Of the general dissatisfac-
tion Of farmers with the quality OF
many Of these machines. and because Of
the delay In obtaining spare parts, the
government. despite a reduction in
prices, still has more than a third OF
this equipment on hand.
In previous letters have referred 10
the favorable condition Of the Italian
electrical industry. II is estimated.
however, that at least l,500, ,o00, 900 is
New-York tribune., 1922-06-18

nent abroad (344.OO0,00O francs). The
government agreed further 10 revive
the famous Cotolle treaty, which pro-
yided for compensation for the trans
portation Of military supplies, and IN
1915 allowed 4 general increase or %
per cent in rates. Finally. tho Treas
ury was authorized 20 set aside q fund
Of eOO,OO0,00O francs 20 be devoted 20
the payment Of long-promised indcmni-
ties 70 the operatives and the restora-
tion OF equipment 20 a pre-war footing
In creating Gn 1879 a special super
visory adjunct Of the Department Of
Public Works FOR tho railroads the
coycrnmcnt clearly realized tho rccos-
sity for artificial stimulation in order
20 insure the success Of military opera
tiore
New-York tribune., 1922-06-18

Although most . t.e shes r.Y.
will welcome o. retlrr % .els e.sssnb
styles. they realize 'ns, l' msy st
% a smaller demand because e ~
more staple character '-a. re i.ss
will possess. To overcome fhls 80,
is movement 0r FOOT dei.gns. .
educate" tho public % ne vssrrg 4
"the proper shoes f3r ffe oltusi'
This. reduced % simple terms, 80
effort % stimulate business by nzdsf
the wearing o. sport shoes f0f stree
wear bad form" or t,s wearing Z
dress shoes for sports wear ssiss.r-
able. and similarly al. al61z ihs r.
An attempt was made early .r iss Jsr
% organize the trade 90 sgDpor 4
definite advertising campaign with iki
end ia view. but 10 failed % ssgslsp
concrete action. However. i1i.T'fBsi
shoe manufacturer an. retailers Fave
taken up the campaign ard ii is sei-g
pushed vigorouslv in r-sny directions.
Although the CHIEF s.yle iegs.op-snt
IN shoes has been applied chl'ay %
women's footwear. tre ner's elt q
the trade has nor besr v.iaosi ~
style features. The l,tro.-cror q
broguo styles some tVo years sgo trt
still carried through .1 many ara
ticns has been ore factor s.ong N
the general reaction toward ee'1onI
IN reducing the volume o. mens ssoe
business. Oid-'me shoe mcn eanns'
remember whea such heavy r5pG
leather and such heavy s0les rave stsr
used % ,he general run e. mer's saatA
In the estimation % ore retailer tsfs,
the use OF the s0-calicd grain 'estatn
has heightened ;he wearing life q ~
for men."
"Or.y .te ether day" he said, -
of my customers came IN here wea ,i,f
a pair o. shoes tha. ! had SOLD -
more than a year ego He tod me "a.
he had worn thar idert.ca. pair =
shoes. without change. during a yers
sojourn in Europe. Z y any wontf
that the mems shoe business has oefs
dulli The plain truth Is that 100 nau
wear has been put into mems Sa'ss
! expect the heavy leather vogue :.
run its course during the eoning -
ter. For spring 1923, In ny epinl-..
the style will shift 20 lighieE ,es'a"
COR men
Along this line another r';inr
estimates that the light fancy ssses
in vogue In women's shoes nas .n@s
ened their wearing life By fuAy
per cent and been one elemen'
building up expanding volume u "
women's shoe trade.