Evening star., 1928-04-08

Chicago has embarked IN earnest upoh
a fresh struggle to wrest from New York
at least a share of the advantage OF
being the great money market Of the
Nation. and to some extent Of the
world. This marks a new round In an
old fight. and while the odds probably
still must be regarded as with New
York, they are shortening.
When an American speaks OF the
stock exchange" he thinks Of but one
thing--the New York Stock Exchange.
Chicago has come to resent this and
sees no reason why she should not have
a stock exchange of nearly equal, II not
equal, prominence and power.
Chicago has a stock exchange now.
So has Washington. So have many
American cities. The difference Is that
upon most of them few stocks are listed
aside from those of local public utility
companies and local and nearby indus
tries of second-rate rank as to size and
influence In the Nations business al
fairs Only on the New York Stock
Exchange are the big issues listed, and
only to New York does the public look
and send Its money when 1t wishes to
| invest. There it very frequently leaves
! it. Chicago wants her share In big
way.
Banks throughout the United States
as far West as the Pacific CoaSt-Send
surplus funds for which they have no
! immediate local loan demand to the
| New York call money market TO take
advantage. of quick turnovers at short
terms. The extent TO which this prac-
tice Is followed Is amazing. Small
country banks with no more than S25,-
900 capital every day are sending sur
I IN
draws funds from the entire Nation.
OF course, this money sent by banks Is
not intended 10 be used in stock specu-
iation. 1t Is sent TO New York TO be
lent to those who require 1t, TO earn in
terest and TO be returned when the loan
LIS due. It Is q side-issue method Of
large and small banks alike of making
more interest and OF keeping their funds
busy. Chicago wants share OF this
When O man who has an idea that
he can beat the market. be he q bank
president. a Government clerk or q
| farmer, wants TO trade in stocks he
goes TO the nearest broker, almost in
variably branch of New York house.
and his order TO buy or sell Is tele-
| graphed to New York. The brokerage
fees. running into millions O year. OF
| course are kept In New York The fees
| stick to the brokers hands whether the
stock speculator wins or loses. Chicago
wants her share OF that money too.
why Chicago Gets That Way.
Chicago bases her attempt on the
fact that she is the second largest city
| distributing center She has 81 rail-
roads. a dozen more than New York.
| entering her portals. She Is the center
Of the second largest manufacturing
industry in the United States. the meat
packing industry.
But, principally Chicago bases her
aspirations on the fact that she has
indeed become a money power, New
York has the advantage Of being =
couple of centuries Older than Chicago
The latter city, being new. for long
time was compelled TO depend on East
ern money to finance her colossal prof.
ectS. With the Boston. New York and
Philadelphia funds she borrowed she
made bic profits, but even as her In
dustries grew the need for financing
grew also.
The war altered this position TO a
material extent. Chicago got on her
own feet financially and now declares
that she can stand alone without help
from New York or any other city For
the first time In her history Chicago
now is a lending instead OF borrowing
community. Her financial institutions
have attained a magnitude which has
changed her from debtor 70 creditor
position.
The time has come. Chicago believes.
when she should be the monev market.
the exclusive money market OF the Mis-
sigSippi Valley and of the territory west
Of the Mississippi, With this accom-
plished, all the millions In that region
which now are tributary to the New
York Stock Exchange, SO far as stock
market operations are concerned. would
become tributary to the Chicago Stock
Exchange Al! stocks listed on the
big board" In New York. as 1t Is
called would be listed on the Chicago
board AS well
The matter goes deeper than the
question Of stock trading. Should Chi
cago prove capable OF dividing the spoils
In this manner with New York, she
would be able TO get larger share OF
ths large and profitable foreign loans
which now fall almost wholly To New
York financial houses
How the Campaign Il Waged.
Chicago is going about the matter In
! an organized way. Already the big
banks In the Loop District have put up
$50 900 900 as 4 pool 10 finance the
money desk at the Chicago stock Ex.
change In order 10 provide q Chicago
call money market Efforts are being
made TO get all the big listings and
a campaign Ii on 10 induce The West
TO do its money and stock shopping at
home.
Ivan Wright. professor OF banking and
finances ut the University OF Illinois
has drawn up comprehensive plan
on which he has been working for I'VE
! years, 1t covers every necessary move
In the campaign 10 establiah Chicago
as money center and shows the big
financial institutions what course they
ahould follow 10 meet with success
Chicago has shown It's teeth ~ 4
money power already Last Fall the
Federal Reserve Bank Of Chicago, con-
/, troiied by banks OF the Chicago Federal
Reserve District declined 10 lower tta