The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1922-01-05

These questions came up daily just
answered. But they are so timely that
few answers, at least, should be at
tempted.
Country banks have more troubles In
hard times, and country people as
whole get into tighter money pinches.
simply because they deal in things
that cannot be turned into money in a
hurry. They have the value in sub
stantial form. The farmers have lands
and barns, that no stock market de-
pressions or panic can wipe out. But
II barn Is not ready money to meet
?ote; a hundredacre field is not legal
tender to pay mortgage.
When times get suddenly hard, and
credit is tight, and people want money
| on the dot TO meet their obligations,
mortgage due in a year does not fill
the bill: a six months note does not
mean ready cash. A bank tries to
collect real moAey for a quick emery
ency, the man with his barns and
acres cannot turn them off.hand into
cash; he sits back helpless and does
not respond to the banks calls: and the
hank pops, as scores Of banks have
popped.
So much for slow credit, fixed CAPT
, tai, longtime investment in the rural
districts, and the peculiar hardships of
lad times In the agricultural States.
Case OF Fixed Investments.
Why are things different in the
cities? Why, with all the difficulties,
dc things move more easily in Chicago,
for instance, than in the little villages
Of the Mountain States? Simply be-
cause money and capital in the large
cities are rarely riveted down in fixed
investments as they are in the country.
A city man has a mortgage on
railroad In what form? Bonds. In
Il pinch the bonds may go down few
points, but that usually Is the wors:
that cen happen. They still are cut
TIP in fairly small amounts; the Stock
| Exchange Is there to take them and
sell them for him at a pric" any mo-
ment: he may peddle them out one by
one or dispose Of them all at once, and
set the money. He does not have to
sell a whole railroad, as a farmer or
country bank might have to sell
whole farm. In other words. his rail
way mortgage is what is called
liquid. Summoned to pay $4,000 or
$40 200 on a few hours notice, he can
90 so, while a little bank or a farmer
might require six months to get rid
OF an equally valuable farm.
Money is the grease that makes
money. is the first necessity of good
business. Lock up too much of the
money in permanent Investments
turn to much of the fluid capital
into fixed capital-and hard times
are made harder, debtors are squeeZ.
ed and cannot pay, and the whole
mechanism Of money, exchange and
trade begins to grind and slacken
speed.
All this applies to industrial business
as well as to farming. Only in farm
ing the hardships are quicker to come
and palmer to the naked eye.
Bygone Troubles.
There are two or three general les
sons to be drawn for these days from
the foregoing statements. About
eighty years ago a panic in the United
States was supposed to be partly
caused and partly aggravated by the
investment of too much ready money
or fluid capital in public lands. Less
than fifty years ago the same hayd-
ships were supposed to have resulted
from too much investment of ready
money, or fluid capital, in railroad con-
struction.
Today, with similar pinch upon us.
we find in many RESPECTS we are doTig
the same things as were done In the
hungry '3O's and '7O's of the nineteenth
century. For instance. with scarcity
of fluid capital in agriculture and
business, we are riveting down mil
lions and hundreds of millions so Sc
curely that they could not be broken
loose by the crack of doom. In one
year since the war we put down nearly
$500 900 900 in new roads.
Unless we are to plunge all business
into the same difficulties as farming,
we have got to hold back and he care.
full. Ready money, fluid capital, Is
what is needed everywhere IL greater
abundance. especially in the ruS<ll dis
tricts We can't tie up our money and
"a -. On mo ti.ann nsn IL Tint is sML.a