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Show MONEY MARKETS INACTIVE AND LOANING RATES DROP 1 Prosperity of Agricultural Districts Means Fi-1 Fi-1 nancial Independence for Farmer; New International Financing. : By W. S. COUSINS, Editor The American Banker. TCW YORK. Jan. 2'. Plethora of N money and decreasing loaning rates continue to be the prevailing features fea-tures of the financial situation. Demand loans at ? per cent on stock exchange collateral, the lowest figure fig-ure since June of last year, and corresponding corre-sponding recessions In 'the longer maturities maturi-ties are indicative of the general trend of finanrhil conditions, not only in the big monetary centers. The president of the American Bankers' association, who is also president of a national bank in the middle west, stated in New York this week that what t lie banks most desired was not more deposl's, but more discounts. The wave of prosperity that has been sweeping sweep-ing over the agricultural sections of the south and west has been transla ted m terms of greater financial independence for the farmer and, consequently, his obligations obliga-tions to the banking institutions have been considerably reduced. When we consider con-sider that the farmer, who a few years ago received $7. Si) for 1000 bushels of wheat now takes in $1750 for the same product, and that for a carload of hogs for which a few years ago the net return was $S00 he now can claim $1800 as his share of the proceeds, we have a clearer conception con-ception of the enviable position of the AJnerb'nn farmer. In New York the money market Is governed gov-erned more directly by the muvements of the stork market and large financial projects. proj-ects. The new position taken by the United states in the international money markets has greatly increased the number num-ber and the magnitude, of our financial problems, even if it has also increased our profits and added to our prestige. Transactions on the stock exchange have been on a very limited basis, and fluctuations have been between narrow limits. Tho general public maintains its sttitude of apathy toward the speculative markets, and professional operations have accounted for what activity has been shown on the "bid board." Attention has been called to the fact that while the recent liquidation in the stock markets has oeen one of the heaviest that Wall street erer witnessed, it has been accomplished ac-complished without excitement and without with-out the occurrence of a single failure. It is also to be noted that whether the war ends now or later, the inflation of war stocks has been effectively checked, most of the expectations of big profits not having- been realized. The. high price of raw-material raw-material and the steady rise in wages have altered conditions so that the difficulty dif-ficulty of handling such orders has been greatly increased. New Foreign Financing. Since the federal reserve board in November No-vember issued its warning against the purchase of foreign treasury bills, particularly par-ticularly those of the European belligerent belliger-ent countries, no transactions of this character have been reported. A banking syndu-ate headed by J. p. Morgan Co., ha?, however, purchased an h;sue of $15.-nOo.OOi.i $15.-nOo.OOi.i 1 en -yea r. t per eent convertible notes of the Central Argentine railway. Heretofore all or most of this Argentine ihianeiug lias been accomplished through London and Berlin, and this deal will he American interests an excellent foothold in the financing of South American railroads. rail-roads. It is understood that the proceeds of the notes are to be utilized to retire what is practically an equivalent amount of short-term indebtedness of the company outstanding in London, represented by two issues, which are to be called in and paid off In aecorda noo with the wish uf the management to co-operate with the British treasury in securing America n railroads in the United States. It was organized in 1S63. and now operates about 3300 miles of road, or not far from t he mileage directly owned either by the Now York Central or by the Pennsylvania rail- road (lines east of Pittsburg) or the j Cnlon Pacific, half again as big as the Norfolk & Western and somewhat less than either the Illinois Central, the Baltimore Balti-more & Ohio or the Louisville & Nashville. Nash-ville. The company's securities have never been issued heretofore in this mar k-el, and probably the knowledge which our investing public here has of the property prop-erty could be summarized in the statement state-ment that the company's credit has always al-ways been high. So far as is known, during t he last ten or fifteen years the company has never gone into tho open market for sale of securities, but has obtained ob-tained all of its new capital from Its own security holders, hy direct offer to them. The company's 4 per cent debenture stock, which corresponds as nearly as comparisons permit, to our first-mortgage bonds here, sold in London for years above par. at a time when there were very few -1 per cent bonds of American railroads which were cpuoted at anything like so high a price. More Greenbacks. One of the evidences of "good times" has been the increasing call for coins and bills of smaller denominations. Secretary Sec-retary McAdoo has announced his intention inten-tion to resume the issuances of $1 and $2 notes, commonly known as "greenbacks." "green-backs." This is hardly in accordance with the popular idea of the greenback, the retirement of which has been advocated advo-cated both by bankers and by government govern-ment officials for some time, and particularly particu-larly since the issuance of the federal reserve notes. The total amount of greenbacks now outstanding is slightly in excess of $346.-000, $346.-000, OoO, and, according to law. this may not be increased. The conversion of the bills of larger denomination into those of tho smaller will not increase the outstanding out-standing notes. It can hardly be said, however, that this new departure is a wise one, tauce it helps to perpetuate the greenback as a part of the national currency cur-rency system. When the with Ira wal of greenbacks was commenced in 1SS5 It was supposed that this government paper would be discontinued as soon and as rapidly as possible, and their place taken by national hank notes. The continued use of greenbacks encourages raids on the treasury gold reserve, which caused . the famous 'run on the treasury in Cleve- I land's time, and a bond issue of $262,- ! 000,001) was made necessary to replenish i the gold reserve. The government should ; not be burdened with the duty of protecting pro-tecting greenbacks, and therefore even an indirect step in the direction of government gov-ernment bills should absolutely be avoided. Reports Optimistic. There 13 no deviation from the optimistic optimis-tic tone of business reports which come to New York from every section of the country. Iast month bank clearings in the United States broke all records. In some industries production has been somewhat curt a lied through the car siiortage, which Is making it increasingly increasing-ly dit tic ult for shippers lo obtain reasonably rea-sonably quick deliveries. Owing lo the increased buying of railroad rail-road supplies, tho steel trade is in a sold -up condition, and unfilled orders on the books of tiic United States Steel col--poratton at the close of December were nearly 12,000,000 tons. This basic Industry Indus-try is in a strong condition and it is probable that the volume of business would be even larger if the great plants could accept more orders. But present bookings are sufficient to keep the mills busy for several months to come. Buying of railroad equipment reached the record proportions last month when the great transportation systems gave out large contracts for all kinds of equipment, including in-cluding rails, cars and locomotives. Some 32.U00 cars were contracted for, while orders or-ders for about S00 locomotives represented repre-sented the largest single month's business busi-ness ever done in that line. A large portion of these orders for railroad equipment equip-ment came from foreign roads, the total to-tal business of this kind being quite extraordinary. The Coal Age says that the past year was the most profitable period in American Ameri-can coal mining and coke manufacture. The value of the coal produced in Pennsylvania Penn-sylvania alone was practically four times as great as the value of the old mined in the entire United States anJ its possessions. pos-sessions. West Virginia's coal output at the mine mouth was equal In value to almost al-most double this year's 1916 gold production. produc-tion. The Increase In coal production was 50.S24.725 short tons, or 91& per cent. The increase in coke was 9.963,207 short tons, or 24 per cent. Exports were greater great-er than in any previous year. The coal reserves of the world amount to 7.500.000 metric tons, of which total the United States holds ol . S per cent, Canada 16 per cent. China 13 per cent and Germany nearly 6 per cent. The United States, Great Britain and Germany together produce pro-duce more than S3 per cent, of the coal consumed In the world, and the United States alone produces nearly one-half the world's fuel supply. |
