[Volume XXVII
THE CHICAGO BANKER
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STATE BANK OF CHICAGO			THE FARMERS’ AND MECHANICS’ NATIONAL BANK OF PHILADELPHIA, PA. 427 CHESTNUT STREET Capital - - - $2,000,000.00 Surplus and Prolits 1,348,000.00 ORGANIZED JANUARY 17, 1807 Dividends Paid - $12,847,000.00 OFFICERS Howard W. Lewis, President Henry B. Bartow, Cashier John Mason, Transfer Officer Oscar E. Weiss, Assistant Cashier ACCOUNTS OF INDIVIDUALS, FIRMS, AND CORPORATIONS SOLICITED PRESENT NUMBER OF STOCKHOLDERS 930
ESTABLISHED 1879 S. E. Corner La Salle and Washington Streets Capital - - - $1,500,000 Surplus and profits (earned) 1,500,000 Deposits over - - 20,000,000 OFFICERS L. A. GODDARD, President FRANK I. PACKARD, Asst Cashier JOHN R. LINDGREN, Vice-President C. EDWARD CARLSON, Asst. Cashier HENRY A. HAUGAN, Vice-President SAMUEL E. KNECHT, Secretary HENRY S. HENSCHEN, Cashier WILLIAM C. MILLER, Asst. Secretary			
YOUR CHICAGO BUSINESS RESPECTFULLY INVITED			
			
A IN CINCINNATI A With Resources of TWENTY-ONE MILLION DOLLARS And every facility for the satisfactory handling of Bank Accounts CORRESPONDENCE INVITED			
World Wide Condition of the Money Market
thrown over by others they may still find it necessary to call upon their banking affiliations for . assistance.
Our indebtedness to London and Paris must not be overlooked in analyzing the monetary situation. Bankers here compute that almost $500,000,000 has been raised abroad by local financial institutions and influential capitalists. A large part of this huge sum, having been obtained for ninety days with the option of one renewal, will fall due during the next few months. It is true that our exports of wheat have increased during each week in August and that cotton ought shortly to be moving oversea more freely, yet merchandise alone will not be sufficient to liquidate our bill. Perhaps our bankers will try to square accounts by placing new security issues in London and on the Continent, but success in this direction may be modified by the inordinate home applications and by the unpleasant impression stirred up afresh by the sensational exploits on our stock exchange. One other probable source of strain upon our money market relates to government borrowing. The Panama Canal is daily consuming a large sum and the treasury’s deficit for the fiscal year begun on July 1st already exceeds $21,000,000. The only conclusion to be drawn is that time money, which is now obtainable below 4 per cent for 1910 maturities, will gradually move up to 5 per cent and that call loans will not long remain at 2']/2 per cent. The central banks of Europe to-day hold $230,000,000 more gold than at this time in 1908, and private discounts at the principal centers are extremely easy, nevertheless the Bank of England and the Bank of France expect ere long to raise their minimum rates, and the best opinion is that money there will by and by reflect not only the usual fall trade requirements, but the extraordinarily heavy government, municipal and corporate necessities already mentioned. Dear money is not predicted, but a distinct advance from the low rates so long current must be regarded as inevitable.
The stock market is passing through a period
I he average manufacturer or merchant has not discounted his paper in large volume since 1907 for the reason that business has been of less than normal volume and collections prompt. Today, however, mercantile bills are appearing in larger quantity, and if the country’s trade expands as is hoped the discounting paper will involve no mean strain upon the idle funds in New York, Chicago, Boston and Philadelphia. Rates for commercial paper are already on practically 4J5 per cent basis for regular maturities —a figure that is equivalent to the return on numbers of railroad stocks. Agricultural requirements, notwithstanding the usual asseverations of the West and the South, will play a part in using up Eastern supplies of loanable capital. Currency movements between New York and interior points last week balanced, whereas formerly there had been an almost continuous inflow at this point. Current prices for cotton and grain are not unsatisfactory from the growers’ point of view, so that the marketing of these two staples is not likely to be unduly retarded. Moreover, Wall Street speculation has involved very heavy inroads upon banking resources at home and in Europe; perhaps the liquidation now in progress will curtail the demands of the largest manipulators, but since the latter are reputedly forced to accept stocks
Will Buy a Bank
Experienced banker, 30 years old, wants to buy controlling interest in a bank with capital of
$10,000.00 to $25,000.00.
Address
B. B., care of The Chicago Banker
New York, Sept. 1.—We are approaching a season when money will be worth more than the present yield on high grade investments, and since it is axiomatic that stocks, broadly speaking, are dear when they bring a smaller return than time money, the speculative position will call for careful attention. Interest rates on collateral loans during the last two years have been lower than the average dividend rate on standard stocks, but the recent rise in quotations prepared the way for a reversal of this order, especially as enormous demands confront the money markets of the United States and Europe. These demands deserve consideration.
New stocks, bonds and notes aggregating fully $1,000,000,000 have been floated in the United States during the first eight months of this year, and the rate of output will not diminish during the remaining four months. It may be taken for granted that during September, October, November and December more than $300,000,000 new securities will be offered. Our four leading railroad systems alone contemplate applications for a quarter of a billion dollars. Pennsylvania may sell $100,000,000 stock; the Gould properties may authorize a larger amount and distribute perhaps $50,000,000; the Harriman system is unlikely to bother with less than $100,000,000 when it comes into the market, while the Vanderbilt roads are also in need of funds. Our European correspondents advise us that $700,000,000 new capital is overhanging foreign financial centers. This represents $1,000,000,000 to be absorbed here and abroad between now and January 1, 19x0. Can the money market assimilate all this, in addition to other demands, without showing-symptoms of stringency? Both the home and the foreign appetite for investments yielding not better than 4 per cent has been spoiled, so that applicants for funds will be obliged to make their offerings attractive. This will tend to raise the level of income which the investor will feel entitled to exact for his money, and this in turn will have a direct bearing upon the quoted value of outstanding stocks and bonds.