The Washington times., 1928-09-08
HIGHER MONEY
IS SEEN IN
SURVEY
~ RICHARD NATION

Money rates continues 20 Re- the
leading factor il analytical discus.
nions ~ finance, markets and bust.
ness Discussing the outlook fcr
money rates, the Guaranty Trust
Company 81 New York finds that
:.the advance ii money rates has
assumed ! more important aspect
ii recent weeks. not only IN finans
cial markets but also Al possible
diaturbinr influence on An other
wise favorable general business OUT.
look, states the current issue 0L
the Guaranty Survey published BY
the Guaranty Trust Company q
New York.
II seems certaln that period Of
high money rates win continue
through the fall, fhe Survey says1
furfher ana no sustained Or inlpoFs
Aant easing seems likely until the
turn Of the year The prophecy
Il generally naada that Gin average
cali money rats az 6h per cent,
and ~ commercial rate Of "a PSF
cent may Be expected Variations
above and below these levels are
certain To come, but the general
trend seems 10 be clearly defined.
The probable effect Be higher
money costs upon business then be.
comes matter az immediate con
Germ ana Importance. some pos
Sible effects may readily be sug
sasted such a. the retarding Of
spacuIati0n. reduced volume q
new Financing. cnEtailment Of plans
for business expansion and plant
projects. ! decreased volume of
installment selling. less new ron.
struction.
Cheap Money Coming
with the stimulus Of cheap
money. which has beer responsible
Tor much 81 the business activity
81 recent years. removed Il re.
mains T. be seen how business WIN
make it, reimbursement to new
money conditions r such posi-.
bilities Is suggested should mn.
terialize reduction "a general
business activity would 81 inex:
liable
Business Is stiIl moving ahead
under the impetus " the first half
year. which seems likely 10 carry
Ii through 1928 with satisfactory
showing but until the elements Of
tho mpney situation are better
understood Or better controlled
forecasts Tor the further future
would Be hazardous.
IN considering the money gitua
ton there are several obvious facts
which must Be borne n nina
FIRST. $a,a23 900 900 of funds are
employed in brokers loans On the
stock exchange, representing az iIit
crease 0f Sl,oaS 100000 during the
last twelve months; second. the
Federal Reserve banks are lOaning
approximately 1000 100000 to
member BANKS ID rediscCunte. show
sng an increase az about $4,000
900; third, we have exported hi
excess DC $50 .00O.O00 0k gold thus
withdrawing potential credit az an.
proxiniately ten times that amount
from the American market; fourth,
tie Federal Reserve banks have
cold more than $780, 900 u
United states securities ana bills
silce the beginning OF this year
a;ld thus consumed this amount
u private credit: fifth, more thar
7S0O,OOO, 900 OF foreign securities,
exclusive Of refunding issues, have
b1en sold here since January i,
and II excess Of $4,000 100000 since
he war.
These constitute the major drains
on the credit supply and show
cltarly that the present atrfneency
Il based npon simple facts ana Is
not artificially created. Only As
these drains are relieved ana Az
new wealth II created by new
CIopg and new enterprise viii II
credit surplus again accumulate.
Business Shrinks
The dollar volume 81 business
measured BY check payments, was
smaller during the week ended sep
TENDER 4 than in the previous week,
but was 3 per cent greater than in
the corresponding period OF 1877.
according to the weekly statement
Of the Department OF Commerce.
Operations IN steel plants showed no
change from the previous week but
were on q much higher level than
year ago. The general wholesale
price index averaged slightly higher
than IN the preceding week. being
shove the level OF last year also.
The price index OF iron and steel
products averaged higher than III
the previous week, but was lower
than in the same week OF 1927.
Copper prices showed practically
no change from the previous week,
but were higher than year ago.
Stock prices again advanced over
the previous week continuing their
increase over a year ago, while bond
prices averaged higher than in the
previous week, but were lower than
d year ago.
Interest rates on time money
showed no change from the previous
week, while call money rates again
averaged higher. Rates on both
time and call funds were consider
ably higher than at this time
year ago. The Federal Reserve
ratio averaged lower than in either
the previous week or the cor
responding week OF 1927. Business
failures were larger in number than
in either prior period.
President John Poole, Of the Fed
eraI American National Bank. has
heen hon0red BY selection to serve
on the National Better Business
Bureau auxiliary committee.
Graham Hodges has recently he.
come 4 member Of the sales Or.
ganization Of Crane, Paris and
Assistant Cashier M. r.. show.
alter. Of the Commercial National
Bank, has returned from 4 vacation
spent In Virginia.
Vice President and Treasurer John
%. Leonard. Of the Washington Saw
ings Bank. IL spending his vacation
at his country home near Frederick,
Nd.