The Union times. [volume] (Union, S.C.) 1894-1918, 1913-08-08

ton ana the west 10 help Move
the Crops-Intended to Meet
Heavy Demand for Currency in the
Early Fall When Produce is Be
ing Sold.
WASHINGTON, July 31.-From
S25,OOO,OOO to $5o,OO,OOOO of govern
ment funds will be deposited in the
national banks of the South and West
at once by Secretary McAdoo to fac
iitate the movement of crops. Fed
eral, State and municipal bonds and
prime commercial paper will be ac-
cepted as security for the money, up
on which the banks will pay 2 per
cent interest.
The motive of Secretary McAdoo
in establishing this new policy as to
anticipate the money stringency in
the late summer and fall, which in
variably accompanies the marketing
and movement of crops, especially
when the crops are unusually large,
as the harvest now beginning fore
casts. He intends to take time by
the forelock and prevent or minimize
the usual tightness of money.
In statement today the secretary
made the significant answer that
government bonds would be accepted
rs par as security for the new depos-
its and that additional money would
De placed only with banks which have
taken out at least 40 per cent, of
their authorized circulation.
Have Gone Down.
United States per cent. bonds,
serving as security for most of the
national bank circulation, have been
depressed recently to new low mar
iet records, dropping to 95 ga dur
.ng the past few days. The secre-
tary's willingness to accept these
bonds at par as security for the $685.
100000 to $5O,00O,O00 of promised
deposits and the inducement to the
national banks to increase their cir
culation up to the 40 per cent limit
is expected to help in restoring the
parity of the depressed IS by Great
ing a new market for them.
For the first time in history the
government will accept prime COM
mercial paper as security for depos-
its. This privilege will be granted,
announced the secretary, in order to
make these special deposits available
to the banks on securities already
within their reach.
Must Be Good Security.
"The commercial paper submit
ted" added Mr.. McAdoo, "shall first
be passed upon and approved by the
clearing house committees of the
cities in which the banks offering
such paper may be located. All COM
mercial paper and bonds must finally
be passed upon and accepted by the
secretary"
Approved commercial paper will
De accepted as security for the de-
posts at 65 per cent of it's face value,
and high class State, municipal and
other bonds, exclusive of government
bonds, at rs per cent of their market
value.
The additional deposits will be
placed with the national banks in the
two or three principal cities in each
of the States where harvesting now
is in progress and where the demand
for money for moving crops most
conveniently can be met. The secre-
tary said it would not be practicable
to scatter the deposits among the
smaller the deposits among the
smaller cities, especially in view of
the character of securities necessary.
The banks will be required to re-
turn the money to the public treasury
when the crops have been moved The
present suggestion is, Mr.. McAdoo
said, that Is per cent be repaid in
December, 80 per cent in January,
30 per cent in February, and 25 per
cent in March.
To Start at Once.
"Steps are now being taken to car
" out the plan," added the secre-
sary, $50 that the funds may be
promptly available for the movement
Of crops" Names of banks to re-
2eive the deposits and other details
IF the arrangement will be announ-
ced lated.
This new policy is the anithesis of
hat adopted by Former Secretary
MacVeagh, who two years ago de-
2lined to make government deposits
20 relieve the tight money market on