Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1913-08-07
S50,0O0,OO0 FUND
To MOVE CROPS
Secretary MCAdoo Provides Fund
to Aid Farmers.
WILL HEAD OFF STRINGENCY
Prime Commercial Paper to Be Re-
ceived by Government as Security
for Deposits-Action Startles
Financial World.

Washington, Aug. with the ap-
parent double objective Of eliminating
the possibility of money stringency in
connection with the movement of the
crops and of affording to the country
a powerful object lesson az to the
value OF the government as an agency
in banking business, McAdoo proposed
Thursday to turn into the channels Of
trade from s25,000,000 to s50,000,000.
This is the first time in history that
the government has accepted com
mercial paper" for such deposits. A
supplemental declaration. however,
says that only banks which have "ta-
ken out at least forty per cent. of their
authorized circulation" will be permit
ted to participate in this distribution.
Commercial paper is to be taken at
SIS per cent of its face value as secur-
ity for these deposits, bonds other than
government bonds for rs per cent of
their market value" and government
bonds at par.
The government will charge two per
cent interest on these funds and the
distribution, is to be limited to banks
IN two or three principal cities" IN
each of the states where harvesting is
now in progress" Fifteen per cent. OF
the money is to be returned in Deem
Der, 30 per cent. in January. 50 per
cent in February and IS per cent in
March. All commercial paper offered
first must be passed upon and APP
proved by the clearing house commit
tees in the cities where the banks Of
fering the paper are located.
Another development of the day was
the investigation by the house Of Sec
rotary McAdoo's recent charge that
New York bankers are engaged in try
ing to depress the value of govern
ment two per cent. bonds in order to
create sentiment against the admins
trati0n currency bill Representative
Medley of Kansas prepared a resolu-
ton asking Secretary McAdoo to APP
pear before the committee to present
proof of his charge.
The motive of Secretary McAdoo in
announcing his new bank policy is to
anticipate the money stTingency in the
late summer and fall which invariably
accompanies the marketing and move
ment of crops, especially when they
are unusually large, as the harvest
now beginning forecasts. He intends
to take time by the forelock and pre-
vent or minimize the usual tightness
of money.
Steps are now being taken to carry
out the plan" added the secretary, 80
that the funds may be promptly avail
able for the movement Of the crops"
The names of the banks to receive
the deposits and other details of the
arrangement will be announced later.
With the net balance in the general
fund today amounting to nearly $132,-
100000, Secretary McAdOo has taken
the stand that the government should
anticipate the situation by placing de-
posts where and at the time they are
needed If the full $50,000,000 is de-
posted this step will temporarily
nearly double the government deposits
with the banks, which at the present
time hold $5S,000,000 of federal funds
Just as Secretary McAdoo was an
nouncing his plan Senator Tillman of
South Carolina was issuing a state
ment declaring that unless congress
acted quickly TO provide an emergency
currency the cotton planters of the
south would lose 100000 900 through
| inability to get money to move their
| crops.