Tulsa daily world. [volume] (Tulsa, Indian Territory [Okla.]) 1905-1919, 1913-05-01
CHARGE INTEL ST
ON us. DEH ITS
BANKS MUST PAY . pEH CENT,
ON ALI GOVERNMENT
MONEY.
WILL increase DEPOSITS
Secretary Mchdoo VIII Follpw New
Order by Placing More Money Ia
Federal Banks.

WASlIlNGTON, April gO. The
fiscal system of the United states
governing deposits Of federal funds
in national banks was revolutoniz d
today by Secretary McAdoo of the
treasury department with an an
nouncement that all government de-
posltarics whether active or inactive,
would be required to pay interest at
the rate of two per cent per annum
beginning June !, upon deposits of
the government
simultaneously with this action the
secretary authorized an immediate in
crease Of $lO,000,000 in government
deposits in the national banks, max
| ing the total $52, ,649,9Gi from which
the federal treasury will earn, under
th new interest order, $l,O53.00O an
nually There are indications that
Secretary McAdoo intends ID release
still more surplus money from the
treasury vaults aud place IT In gem
eral circulation through increased
deposits with national banks. In a
statement tonight he said:
with the banks paying interest on
government deposits, the secretary
may be justified in keeping larger
balances in the national banks there
by increasing the volume Of money in
circulation and to that extent reduc-
ing the amount up In the treasury"
Change In Secretaries
Mr.. McAdoo also announced "a
radical change In the character Of
securities which the treasury depart
ment would accept for government
deposits. Instead Of requiring that
the national banks secure treasury
deposits exclusively with United States
or provincial government bands, they
will be allowed in future to secure 70
per cent with government bonds and
the remaining 80 per cent with high
class state, city and county bonds, ac-
ceptable to the secretary Of the treas
ury, tc be taken as soucrity ut 7j per
cent Of their market value but not
to exceed par.
This is the first time in history
that the treasury department has call
ed upon the banks To pay interest on
what are known as active deposits or
accepted. except in periods of finan-
cial stress security other than gov
ernmcnt bonds Active depositaries
are those which conduct checking
account for the government. cashing
checks of the disbursing officers and
rcplenishing their authorized govern
ment deposits from customs and in
ternal revenue receipts deposited with
them. There are 800 inactive deposi-
tarics, each holding $1,000 Of govern
mcnt funds. Upon these deposits.
which are not disturbed by checking
accounts, the government has drawn
per cent. interest for the past five
years. These are the only govern
mcnt accounts which ever have earn
ed interest
Years of \gitation.
For years there has been agitation
In and out Of congress to as4rss the
national banks interest on their gov
ernment deposits This Invariably
has been resisted by previous ad-
ministrations on the theory that the
banks with active accounts perform
ed much clerical work for the gov
eminent The house committee on
expenditures In the treasury depart
ment at the last session Investigated
the question and recommended that
the secretary Of the treasury be re-
quired charge interest for lhe use
of the governments money.
Secretary McAdoo tonight deciar-
ed he did not anticipate any serious
resistance on the part Of the banks to
the new policy. II any bank was dis
posed to surrender It's account by rea-
son Of the order. he said. there were
many others willing TO take IL up.
The two per cent interest charge
will be based upon theaverage month
ly balances Of the governments ac-
count in each deposltary. payable
January 1 and July / Of each year
The s1O.O0O.OO0 today ordered trans
ferred from the treasury vaults to the
banks will be distributed
over the country.
Shriaers eat O. Hotel Tulsa tonight.
6 o'clock. Only card is neceFsary-