The Wall Street Journal from New York, New York • Page 10

Si rww -Mf wv 1 ft 9 V1T I MONEY AND EXCHANGE EMERGENCY FLEET ALLOTS STEEL ORDERS the Seaboard National Bank HIGH PRICES, THE CAUSE, NOT EFFECT, OF EXPANSION WRONG THEORY ENTERTAINED BY SOME ECONOMISTS THAT SO-CALLED INFLATION IS TO BLAME A Banker Expresses Himself After Reading an "Explanation" Insist That Present Problem Ie No More Than the Simple Question of Supply and Demand Bank Loans and Deposits Expended "Some of oar half-baked economist are too fond of mixing up cause and effect in attempting to explain rising price and the present high cost, of living," said a banker, laying aside a daily paper in which he had just read a long editorial dissertation on the a II -Absorbing subject. This writer has for some time been discussing the question of inflation, which he says is the cause of higher prices, "Now, In the first place, I don't admit that there has been Inflation. Call it expansion, if you like, but inflation conveys the impression of a boom based upon unsound currency. We will say there has been expansion. Expansion of what? Of credit, which finds expression, it may be, in larger issues of Federal Reserve notes and Government bonds.

But back of this condition, and the cause of it, is your rise in prices. The rise came first, the expansion afterwards. "The solution of these economic problems is not as difficult as some people imagine. Some theorists make difficulties for themselves in finding an answer. The simplest answer is nearly always the correct one.

In this case, it is merely a proposition of supply and demand. You have your increased demand and -shortage of supply and up go prices. Credit is immediately invoked to meet the enlarged production. "I will give you a concrete Illustration of this fact The other day a very good customer of ours, one who scarcely ever borrows, came to us and said that owing to the extraordinary advance in the cost of the raw material which he used in his business he felt compelled to ask us for an extension of credit. He wanted immediately and might have to go to $500,000.

We gave him this Tine. Now, this meant that we were prepared to increase cur deposits by $500,000, not because of any new undertaking, tart to enable this man to go ahead with his business and meet the rise in prices. "This is only one instance of what is taking plaoe every day in times like these. The great industrial activity into which the war has plunged the country has made it necessary to expand credit facilities. New enterprises are being undertaken for the prosecution of the war.

The Government by its huge war loans is at once absorbing credit and creating new instruments of credit You can scarcely have too much currency under these conditions, because the gigantic industrial activity and the greater emplovment of labor throughout the world are making greater demands for currency for ordinary use. "Suppose for one moment that the war were to come a nw tfcnt tha nwmmpnt stooped issuing further war loans and shut off its war orders. There would be a sudden stoppage I aemana ior maiermw. vn.nt in immediate slumo in prices wnui wuuiu would follow and your increased currency would find Its way back to the federal reserve Denies as iuu and the notes would be destroyed. Here again is an in- 9 mnnlv and demand.

"If Inflation, or expansion, is the cause of high prices, I wo oft like to ask those theorists wny we pneo ui hao nnf AfvAiieed alone? with other food- stuff? And why has the price of real estate bocn going down in recent years! surely iiuiauim inherent quality they maintain for it, it must be general In its effect There is no difficulty over the world supply coffee today, therefore its price remains unaffected. "The quantity theory of money; that is, that an ln- i tjrana nf monrv make for a rise in nriees, is all very well in the abstract and in solving price movement of long duration. But in practice it offers no satisfactory explanation, since it carries top many qualifying reservations. But in time, like these we do not live to go far beyond eupply and demand to explain the theory of expansion. The National Bank of South Africa, Ltd.

Paid-Vp Capital and Reserves $17,760,000 Offers to American banks and bankers its superior facilities for the extension of trade and commerce between this country nd Africa fttew York Agency, 10 Wall St. R. E. SAUNDERS, Agent Vonr Snrolus Funds deposited with this Company will earn a liberal totoroot. MetropoUtanTrnst Company 60 Wail Street Union Trust Company of New York 60 Broadway 428 Fifth Ave.

786 Fifth Ave. CHARTERED 1804 Acta as Executor, Guar diaa. Trustee, ate. Allows interest oa Deposits. THE LONDON CITY MIDLAND BANK LIMITED Head Office: 6, Threadneedle St, London, E.

2. Foreign Branch Office: 8, Finch Lane, London, E.CJ. CLASSIFIED ADVERTISEMENTS MELT WAMTED MAUD BOOKKEEPER Permanent position open to experienced Wall Street 1 Bookkeeper. References required. Opportunity.

Address Box 4 The Street Journal WANTED By a N. T. Btook Exchange firm an assistant bookkMper. wU 8trt mprln MMntlal. Addrau In own baadwrttlns.

Utlnjr xprinc and aaUry uptoUl Bos EV Tfio Wall Btroot Journal rOSITIOK WAKTBD MAUI TELEPHONE otork, with (our yoara zporirae, wishes yosHloa: exoanmt rofarmoaa. Address Bos 8. Tb Wall Btroot Journal FOR BAUD country om and oaob In rxohan: builders, prosont intrr feomo and coon la cxonan" ouu AAdraes Jtoom la, Bast ad fiUooU toldor oo iraars. lJr NEW YORK FEDERAL RESERVE BANK Statement of the New York Federal Reserve Bank for the week ending March 15 shows a decrease in reserves of the total reserve being 620,107,889 as aeralnst $678,705,549 the previous week. There has been considerable rediscountlng as there is an increase in the item Bills Discounted and Bought i ol The bank has decreased its investments In U.

a. Bonds and Notes to the extent of $40,011300, this item standing at $9,798,498. The item S. Treasury Certi-: ficates of Indebtedness purchased from banks with agreement repurchase within 15 days" increased $55,681,000, the total being $132,892,000 as against $76,711,000 the previous week. Member bank deposits decreased $24,609,661.

IIKSOIRCES Mar.l5,18 Mar. 8, 18 Mar.l,17 Gold settlement fd. $18,219,000 $42,770,000 $16,847,000 Gold in vault 824,677,503 818,676,820 209,921,927 Gold with for agcy 18,112,500 18,112,500 Gold with art in redemt'n fd 219,028,085 259,225,545 Total gold res $579,937,088 $638,784,000 $226,268,927 Leg ten notes, sil ver ctf sub coin 40,570,300 39,921,183 8,862,390 Total reserve $678,705,649 $285,131,318 Bills discounted and bought: Commercial, paper 241,145,665 223,296,121 917,453 Bonk acceptances 182,116,200 178,255,610 Total $423,261,866 $401351,732 Investments: bonds notes 9,798,498 49,810,298 $25,877,644 706,550 certificates 132,892,000 76,711300 Other resources Total res $1,185359,7641,206,778381 $282,428,266 LIABILITIES Capital paid in $19,644,850 $19,641,250 $11380,400 255,700,855 Memb bk dep net. 593,819,761 618,429312 1353,449 5,729,071 Non-mem bk dep net 1,648347 Gov't deposits 8,600,007 Due to other banks, net 24,009,000 Fed Res notes, net. 461,718,700 7475,683 7,866377 86,762301 451,780,860 72382,536 All other liabil 76,059,087 Total liabil $282,423366 157,865,615 outstde.

626.168,085 527.365,545 Against this there is deposited with TTt Pm acpnta: Gold iawfl money 209,028,085 249.225,545 Commercial paper 428361365 401347317 157,865,615 FOREIGN EX1TANGE The foreign exchange market opened with demand sterling at 4.75. Lire cables were 8.68, Swiss cables 4.40 and peseta cables 24.95. Trading during the short session was practically without feature. Swiss cables were a shade better at 4.40, and demand sterling was quoted higher at 4.7580. Lire cables were unchanged at 8.68, and peseta cables at 24.95.

Open: Sterling Francs Lire Guilders Demand 4.75 6.7214 8.60 45 Cables 4.76 A 5.71 8.68 46 Closed: Demand 4.7580 6.72 8.60 45 Cables 4.76 A 6.71 8.68 47 U. S. Treasury Certificates Boston In circular to banks offering new ieiue of 4 Treasury certificates acceptable in payment for taxes, Governor Moras of Federal Reserve Bank says: "A rough estimate of amount of taxea due in this district is $200,000,000, and it will be very desirable to anticipate as large a portion of this amount as possible. We are instructed by Treasury Department to urge banks to purchase and sell these certificates to their customers having large income taxea to pay." New York Sub-Treasury Paid to Received Banks From Banks Banki March :5 $6354,000 82,643,000 Lost $289,000 Sub-Treasury debtor at New York Gearing House $1315,762. Federal Reserve Bank a editor at New York Clearing House $82,754,573.

Chicago Money Market Chicago Monetary situation in Chicago changes very bttle from week to week. Money is exceedingly tight. The probabilities of any change in the situation for several weeks to come are considered negligible. There is, however, no stringency. There has been Increased inquiry for acceptances, both bank and trade, in the last few days from Chicago and interior.

Country banks in Iowa, Indiana, Illinois and some parts of Wisconsin, as well as Michigan, have been buyers. Bank Clearings 1918 1917 Change New York $58063,885 $482,589,027 Inc. $97,674,858 Philadelphia $54,692,814 Dec 91,837,948 St Louis .21364 Inc. $8,458,380 NATIONAL BANK NEWS Washington Applications to the Comptroller of the Currency during the week ending Friday, March 15, 1918, for authority to organize national banks and to convert state banks into national banks, were as follows: For organisation of national banks: The Calera National Bank. Calera, capital the First National Bank of Haviland, capital the Anderson National Bank of Carlinville, capital the Finst National Bank of Pkher, Okla capital the First National Bank of 6t Helens, capital $25,000.

For conversion of state banks: The First National Bank, Montgomery, capital conversion of the First State Bank of Montgomery. The First National Bank of Jordan, capital conversion of the State Bank of Jordan. Charters were issued to the following (original organisations) The Farmers National Bank of Follett, Texas, capital the Tucson National Bank, Tucson, capita $100,000. Voluntary liquidations were: The Peoples National Bank of Hackensack, N. capital $160,000.

Liquidating agent, Courtlandt Linkrouin, Hackenaack. Consolidated with the Alliance Trust Guaranty Co. M. Hackensack. WashingtonJncrease in rational bank notes outstanding ior tha week of Mar.

15, $574jB. MILLS TO FURNISH HEAVY TONNAGE TO FABRICATING SHOPS IN CENTRAL WEST FOR STANDARDIZED SHIPS Mors Specifications, for Steel Bars Issued to Eastern Pern-' sylvanja Mills Structural Orders in February Called for About 75,000 Tons Steel Shapes Heavy Output of Ship Plates Nails for Army Buildings Manufacturers of tractors, recently awarded contracts for about 2,000 machines by the U. S. Government, are now actively in the market for the steel required in construction work. The Emergency Fleet Corporation is distributing a large tonnage of plain shapes and plates required by fabricators in the central West, who have previously entered into contracts with the Government and also with the Submarine Boat Co.

and the American International Shipbuilding Co. to fabricate the steel required for building standardized merchant boats. These individual orders run as high as 30,000 tons, but many smaller orders have also been placed for the small shops. It is estimated that total orders taken by fabricating shops last month amounted to approximately 75.000 tons, about half of which was taken by the American Bridge Co. Steel mills recently have concentrated much energy upon increasing production of steel plates especially of the sites required iailhipbuilding.

As a result of this activity, it is estimated that ship plate-production now is not far from 100,000 tons per month, and four other mills now building are expected to be ready to roll plates in the next 80 days. These mills are being constructed by the Brier Hill Steel Co. of Youngstown, the Penn-Seeboard Co. of Newcastle, Worth Brothers, Claymount, Del.J and the Lukens Steel CoatesviUe, I'a. Mills having heavy orders for plates for export to Japan expect to receive shipping instructions in the near future as licenses are likely soon to be issued by the Government for export to China, Japan, South and Central America, but very few licenses are likely to be issued for .1 V.

ft Cf.1 loreign countries ovner uian uw vi mu, iheets continue in active demand, and some additional Government orders running from 5,000 to 15,000 tons are likely to be placed speedily, although most of the mills have capacity sold up to July. Sheet mills are operating scarcely more than 60fr of capacity because of the recent railroad congestion, while plate mills are operating 90 to 95 of capacity. Wire manufacturers have inquiries for 70.000 kegs of wire nails, including 40,003 kegs for the Navy, an inquiry which was put out several weeks ago. The other order comes from the General Engineering Dept. of the Army, which requires 80,000 kegs for export to Fiance.

Distribution of the latter contract will, be made by the Wire Committee of the Iron and Steel Institute, and about half the entire order will probably be given to the American Steel Wire Co. The Imoerial Munitions Board of Canada Is asking American mills for about 1,000 tons of mild steel. Government warehouses that are to be conitructed In the interior require about 4,000 tons of concrete steel ban and an inquiry has also been put out for MOO tons of hard steel bars for shipment to Japan this year. The latter bars are wanted for building the Imperial Hotel at ToWo. The Pennsylvania Railroad has awarded several additional orders for bridges, making the total contracts placed In the last few days 1300 tons, all of which wJl be furnished bv Independent shops.

The Southern Rafl- ti. aVn htda on 1.100 tons of steel for bridge work and the N. Y. Central has given an order to the Phoenix Bridne Co. fur a viaduct, the steel Tor winch win oe lur-nished by the Bethlehem Steel Co.

The Bethlehem plant will also furnish the steel for the office building to be conrtructed on Waf- Street, this city, for W. R. Grace Co. The Ike Superior Ishpcmmg r.ailroad shops at Marquette will be built by Arnold A Co. of Chicago, and the steel will be furnished by the Lackawanna Bridge Co.

JAMES STILLMAN, TIIE BANKER, IflES OF HEART TROUBLE Began Business With a Cotton Commission House Before He Was tl, and BeeanCe Head of National City BankDirector in Many Largs Concerns James Stillman, chairman of the board of directors of the National City Bank, the presidency of which he resigned in 1908, when he waa succeeded by Frank A. Vanderlip, died suddenly of heart failure, Friday, at his home in New York. Mr. Stillman was born in Brownsville, Texas, June 9, 1860. He was educated in the public schools-of Hartford, later attending a private achool at Ossininf, N.

Y. Upon leaving school he entered the employ of Smith Dunning, a New York cotton commission house, becoming a junior partner in the firm before he had attained his majority. At the age of 23, Mr. Stillman was intrusted by Moses Taylor with the construction of the Houston A Texas Central Railroad. In 1891, Mr.

Stillman succeeded to the presidency of the National City Bank. Ambition of Mr. Stillman was to make the National City Bank in this country what the Bank of England was to Great Britain. In two years after Mr. Stillman took hold of the National City Bank its deposits jumped from $12,000,000 to $30,000,000.

By 1897 the bank's deposits had reached $90,000,000, which was a new high record fyt the United States. Mr. Stillman in addition to being chairman of the board of the National City Bank, was a director of the tu: a VrVi Wecfern Rnilwav the Mercantile In- eurance Co. of America, the National City the North British Mercantile Insurance Co. of London and Edin-borough, the Queen Insurance Co.

of America, United States Trust Corp. and the Western Union Telegraph Co. He was also a trustee of the Lincoln Safe Deposit the New York Trust Co. and the United States Trust Co. of NeWFuneral of the late James Stillman will be held at 6t Bartholomew's Church, Madison Avenue and 43rd Street this morning at 10 o'clock.

A banker who was intimately connected with the lato James StiUman says that the secret of his success was his ability to bring other great men to co-operate with him In his business activities. "He was not afraid, like some euccessful men, that he might be overshadowed by others. Stillman was not so much a banker as he was a financier. When he took charge of the National City Bank he did not know much about the technicalities of banking, but ho succeeded in making the City Bank the greatest institution of its Wnd by reason of the fact that he brought on to the directorate and into the official management of the bank the most 'resourceful and the ablest men in the country. James fitillman's career on of the best Instances I know 18 Broadway and Beaver Street, New York Condensed Statement, March 4th, 1918 Resources Loans and Discounts $40,292,715.97 Overdrafts $30.73 U.

S. Bonds 7J58.450.00 Bonds, Securities, Etc 3,378,046.41 Doe from Banks (Net) 336,284.26 Due from Federal Reserve Bank of New York 8.6M.617.20 Cash, Exchanges and Due from U. S. Trees 7.784,766.46 Customers' Liability account of ac- ceptances executed by this Bank 800,000.00 $68,745,711.04 DIRECTORS CHARLES THOMFSOJI, WILLIAM H. WOODUI, JOSEPH SEET, BENNETT L.

UILL, SAMUEL O. BATNR. P.DW. H. R.

CRERX, IIEnY i rOMJKR, EDWARD J. CORXISH. Ariier. Water Works Elec. 5s, 1934 LADD WOOD Uombors Now York Stock Exchanso WALL ST.

H. Y. ToWsh SUS Roto. NEW JERSEY SECURITIES B. H.

F. W. PELZER Members Wow York Stock Exchanso Phone Broad 6X37 1M Broadway. N. Y.

SPECIAL CIRCTLAR UTAH POWER LIGHT, PFD. Bent oa roquest JOHN NICKEHSOX, JR. TraUB DrsaHaMBt mi How Tor BUcfclcma TaHo4 Railway So, 1S3S reaoral Dre 41 Cam. Motoo rockarS Motor Stock aa 9we MERRILL, LYNCH CO. Monitors Kow York Stock Exchanso WALL ST.

nN Reotov SOT Kow York FOR SALE St. LawroMO ol A raocr So, ISlt WktH( A lk KrU 4a. Caaaelaa Norlhra oal A Oro Dock 5a. 1SSS Savaaaah Elocirto Coat. WARE LELAND I Mw York Stock Eehno raw CBlcaso Boora 01 raao TeL Rector $1 BROADWAY, N.

T. Northern Electric Co. 1939 Shawlnlfan Water Power 6s, 1919 Sutro Bros. Si Co. Mom bora Now York Stock Eaekaase ue araawor.

Row York Toloakaoio Woctor T3S0 SHORT TERM jeOTXS RAILWAY EQUIPMENT BONDS MUNICIPAL, BONDS roasuaN government securities BULL ELDREDGE, ttaaoao) Strop Wow Tark Tot. Canl.aoi oti New Yorlc City Bonds Barr Schmeltzer Mombero Kow York Stock Exchanso 14 Wall Street Specialists New York SWARTWOUT APPENZELLAR Mombors Now York Stock Eschaas Pine Street New YorE Cataract Fowor A CoaMt So, ISXT Whooltaar Elortrio So, IMI AloaaV A Nortkora Ratlwar lot So. JOot ttrrat WrMcra Powkt Oa. 1SSS PartlaaA Rollwor Ufet Power So, 1S4S S. IL TAYLOR I.FZZZZr New Jersey Securities VAN SANT LEGG 23 Broad St, N.

Y. Telephone 2930 Broad orrici space wamted wwwwwvwy. broker wants to eoeuro furnUh.d with boo n. or mora floor apaoo In flnanolat dUtrict Addroas Boa B. The Wall Btroot journal.

of sjuoeeeaful leadership In finance. He drew around him men who were able to carry out his ideas successfully. "I would not say that Stillman was an ambitious man, and probably the results have been far greater than he ever set out to accomplieh. lie had a well-ordered mind and knew how things should be. He had orgkniied a eyv -l Ul tem and Inteuectiuai xorce arouna mm wuica wc iu bring about readily the fulfilment of his desires." Domestic Exchange Montreal N.

T. exchange $16.25 to $16.6625 premium, up 63.7845. San Francisco New York exchange par, unchanged. New York State Bank Call Athanw Simertntendent of Banks Skinner issued a call for the condition of state banks, trust companies, sad a a. individual and private dajuu, as oz we ciose or.

ousinaw March "Sliver Zimmermann A Forshay quote silver 8tt, unchanged; Mexicaa isOuu 99, anchsnged. i Liabilities Capital Surplus and Profits (Earned) 3478.725J5 Circulation 69jm0 Reserved for Taxes 14838UI Acceptances executed tor customers U. 8. Bonds Borrowed 800X00.9$ Rediscounts with Federal Reserve Bank a.00141$J$ Deposits $14MaXT PETER MeDONIfELL, MICHAEL J. DAONOIf, WILLIAM K.

CLE VK RUBY, DAVID H. B. JONES. ADDITIONAL WORKING CAPITAL tor seasoned Industrials with demonstrated earning capacity. Contracts financed.

NATIONAL FINANCE CORPORATION Calvert Building. Baltimore, Maryland St. Louis, Ry Mt A Pac Com Carbon Steel St. Louis Ry Mt ft Pac Ss Lima Locotaotlre New Orl Gt Northern 5s Empire Bef Ss Peerless Truck ft Motor 6s Union Steel 8s Central Diet Tel 6s Westughooso Mack te Kans aty. Via Term Iftt Jones ft Laaghlin Steel Ss wT.tr" C.

H. IIENSEL Prtrato wiro to PhfUdolokla una Plttofcarork A. L. CHAMBERS CO. BUFFALO SECURITIES Maria Bank Building BUFFALO, N.

T. Use the Wires Our Expense Railway Equipment Bonds EVANS, STILLMAN CO. Mombera Now York Stock Exchanso CO BROADWAY, N. T. Telephone Rector 8871 City of St.

Louis Bonds Smith, Moore Company 601 Olive Street St Louis, Me, SaoHarioro la ATLANTIC MUTUAL SCRIP lira, of 1010 and 191S called for redemption Fobraary a Tfeo 101T and Now 1919 Iwuoa now dealt In. Advise mo ae to your r.Qolr.ni.ats- A. UtCUS LAWRENCE IS WALL STREET Tel. Root a 1UT-1S TODD SHIPYARD 6s, 1921 TEFFT A CO. M.mbora Kow Tork Stock Exchanso Raaoaa Sttoot Rot ToUohooe 6400 Hoetor at INCOMES la the name of a Ilttl.

monthly Maaastae which we will end to you without Chars. It la our aim to make the moit eonctee and valoaM aock.t odIUun of financial nows that la published, Its objoct la to rr. A.k for It. BKEED, fcLLIOTT ft HARRI50N 10S So. La Sallo Ckloaa.

CfaHaaaH InSlaaaaollo PotfoM Olovolaaol Wllwaakoo LAIRD COMPANY Specialists la Atlas, Hercules and du Pont Securities du Pent Building Wllatlnfton. Delaware The advertising on the financial pages of the is rigidly censored. GOVERNMENT a MUNICIPAL BONDS tieldixq rmoM 4H to William fpmpany 1. Wall Btroot, How Tork St. Loalo ClaHaaatl Chloaaa ntrakavali Woodbury tS: Company Bonds 44 Pine Street No-vrTbtk Specialist DETROIT MOTOR STOCKS CHANDLER BROS, CO.

Vmnb.ra Nw Tork Btook Exobaaa. B4 PISE STBKKT Tol. Mm SSSe NEW TORK tlim SOS ease sw laaaa mwawaejeres KIDDEII, PEABODV Gil. 115 Devonshire 8L 17 Wall St, Eootoa BARING LONDON JIUDBOM NAVIOATTOM CO. Sj FONDA? JOHNSTOWN OU)VERSVILLE iS.

IM BRITTOrJ ROLLINU AOU BHOADWAT, MEW TOBUC CITT. To I. OS4 Rroto. Wtohlta ratio Marthwoot Boad. Traao 4k OkUboaia So.

1S4S St. Laaa. Uockr Moantala 4k raelSo Stook uakiu a Vcflkin Stacks t-t xrxr BTAVr.nlV ST WIIMaaa IV isu now ora Vfcaaaa Bsee a boot tl If.