Evening star. [volume] (Washington, D.C.) 1854-1972, 1908-07-03
NATIONAL BANK CALL
TREASURY TO WITHDRAW
ABOUT $45, ooo, 900 ON JULY Is.

Another large withdrawal of federal
funds from national bank depositaries was
ordered by Secretary Cortelyou late yes
terday afternoon. The withdrawal had
been expected for some time, and there
was no surprise when the following notice
was issued from Mr. Cortelyou's office:
THE Secretary of the Treasury today
announced a further call upon the ma
tional bank depositaries for approximate
ly $45.OOO.O0O. to be paid on or before
the 18th instant"
This action of the Treasury Department
is In line with the familiar policy of with
drawing public moneys from the national
depositaries in the spring and early sum-
mer when the need of an extra large vol
ume OF currency to carry on the COM
merce of the country has for the time be-
ing ceased to exist The large with
drawal at this time, however, is regarded
as particularly advisable in view of the
prevail. Money is plentiful and cheap
and many banks are eager to turn back
into the Treasury the funds which they
gladly received during the panic last win
ter.
The Legal Limitation.
The call does not apply to depositaries
having government funds to the amour,
of $4,000 or under. OF the 1.4S3 national
depositaries. about 100 come within the
$4,000 limitation, and to realize $4,000
900. each of the remaining banks will be
required to transfer to the Treasury
about per cent OF its holdings. exclusive
OF the amount required to meet the checks
of the disburSing officers.
1t has long been the policy Of the Sec
retaries of the Treasury to deposit gov
eminent funds with the depositary banks
only in cases of urgent public necessity
and to keep them there only SO long as
the necessity exists. At this time there
Is redundancy of currency in nearly al
sections of the country, and although the
supply in the Treasury is ample for all
purposes. Secretary Cortelyou decided to
call in about $45,OOO,OOO
The call at this time can have no dis
turbing effect on the money market. as
many of the banks have such large
amounts Of surplus on hand as to make
it rather to their advantage than other
wise to surrender a portion of their pub
lie deposits and so avoid the payment OF
the per cent interest charge imposed by
the currency act passed by the last SEES.
sion of Congress.
Will Increase Working Balance.
The sum called today will increase the
working Treasury balance. to abou,
s11o.OOO.O0O, leaving about $1O9. 100000 still
in the depository banks subject to the
SecretaryS orders
The present withdrawal is interesting in
view of the operation OF the Aldrlch
Vreeland currency law. Several national
banks have already returned to the Treas
ury voluntarily the deposits of public
money which they have been holding, the
reason being that they are unwilling to
pay the interest charge of per cent pro-
vided in the new currency law.
This provision has now become effective
and several other banks have signified
their intention of returning to the Treas
ury all or part of their deposits of pub
lie money. Many bankers fail to see any
great advantage to be derived from fed
eral deposits except in times Of stress
and now that the law imposes an interes,
charge and money is cheap the margin
Of profit is small. The indications are
that the new currency law is accomplish
ing all that it's authors expected of it sc
far as producing an automatic contra ctiOn
of the circulating medium is concerned
National bank depositors now hole
$163, 81 947 of federal funds. When the
withdrawal OF $45.OO0,OO0 is completed
there will therefore be little more thar
s11S, 100000 left in the banks. The actua
working cash balance in the Treasury
which now stands at about ST. WO,OO0
will be increased to $1l6.OOOOCO. or to ar
amount about equal to the aggregate LEFT
on deposit in national banks. The Treas
balance as this for a long time. During
the panic early last winter. when the
Treasury authorities were doing every
thing in their power to aid the distressed
business situati the working cash bal
ance was reduced to less than $lO,UOO,OOO