The Bridgeport evening farmer., 1913-05-13
Interest From National Banks
 Great Saving

Washington, May 13-The order of Secretary McAdoo that national banks after June list must pay two per. cent interest on government depos- its is the start of what will eventu- ally be great saving to the Amer jean people
 The order follows closely the rec concentrations of g, special House Com n1fttee which investigated the govern ment Repositories last year. This com committee, dominated by Democrats and headed by Representative J. Hen ny Cooke, of Ofldos reported to Con- gress fragrant examples of special priv neges in the distribution of federal funds among banks
 The report was available to the Taft months before 1t went out of office yet Secretary MacVeagh paid no at tention to it.
 The report showed that in 1908 the number of federal deposHtor1es had grown to 1,486. These banks were di- vided into two classes about 1000 of them temporary Repositories, the rest regular Repositories.
 Both sorts of deposftortes were ere ated arbitrarily by the Secretary of the Treasury. In the temporary de- pository the government usually placed the sum of $1,OOO. The Treasury De- partment never distributed this sum. Before 1908 the temporary Repositories were not required to pay interest. In 1912 they were required to pay two Der cent.
 Having this s1.ooO on deposit, the bank was permitted to print tsGoV- erment Depository on it's windows it's stationery and advertising mat ter. In other words, the Republican admtnistrat1on entered into an adver- Using scheme pure and simple with favored banks. For this gilt edged advertising the favored banks paid two per cent. on S1.000, or $20 per year.
 All the revenue of the government got out of 1t in four years was $6s8- 407-26.
 On the other hand, in the 400 or so regular Repositories, the govern ment has kept funds which have to- ta4ed as high as $18S, GOO, 900. On this vast sum the Treasury has never ood- Iected dollar of interest. And the Secretary of the Treasury could give the money to whatever banks he chose to favor
 The committee estimated that in 2e years the government, by not collect ing two percent on this money, lost $36, 500, ,923
 Moverover the Republicans have al- ways kept in EtRDe Treasury a sum far in excess of the amount needed for working balance At times this excess has equaled $65,OOO, GOO. Had
 
 per cent. of it would have brought $47,610o, ,S6O to the Treasury in 2e years. 2 Thus this single instance of Repub- Iican favorftdsm and special privilege has cost the people over $83, 1000 y000.
 Secretary McAdoo has taken the first step in correcting a great abuse of power. But his order will be only a beginning. Representative Cooke comes from Ohio where there is compulsory depository law. The state treasurer, instead of using his own discretion in deEignabing banks to receive money, aldverftiE9as for bids, and the money is deposited with banks willing to pay the highest rates of interest ou it, giving small country banks opportunity to use these funds.
 Under this law Ohio is getting an average to 3 1-2 per cent- interest on state deposits.
 MT. Gioel1e has interoduced in the House a similar and competitive law. The action of Secretary McAdoo in going to his legal limit in following the recommendations of the commit tee indicates thak he will favor the depository law. Such law will be great revenue producer will end favpritism, and wall give all banks, the great city dnztitutdon and the small town banks alike according bo their assets a chance to receive gov ernment deposits.