South Bend news-times. (South Bend, Ind.) 1913-1938, 1913-08-01
GOVERNMENT WILL
HELP MOVE CROPS
twenty-five to Fifty Millions
to be Deposited in the Ma
tionaI Banks in the South
and West at Once.

WASHINGTON, Aug. Twenty
five to fifty million dollars Of govern
ment funds will be deposited in the
national banks Of the south and west
at one by Secy. McAdoo to facilitate
the movement of crops. Federal, state
and municipal bonds and prime COM
mercial paper will be accepted as Sc
curity for the money, which the banks
will pay two per cent. interest.
The motive Of Secy. McAdoo in es-
tablishing this policy is 10 anticipate
the money stringency in the late sum-
mer and fall, which invariably accom-
panies the marketing and movement
Of crops, especially when they are I'M
usually large as h harvest now be-
ginning forecasts. He intends to take
time by the forelock and prevent or
minimize the usual tightness Of
money.
In a statement Thursday night. the
secretary made the significant an
nouncement that government bonds
would be accepted at par as security
for the new deposits, and that the
additional one would be placed only
with banks which have taken out at
least 40 per cent. of their authorized
circulation. The United States two
per cent. bonds, serving as security for
most of the national bank circulation,
have depressed recently TO new low
market records, dropping to 50 "a
during the last few days.
The secretary's willingness to accept
these bonds at par as security for the
% to so millions of promised deposits,
and the inducement to the national
banks 10 increase their circulation up
TO the 40 per cent. limit, is expected
to help in restoring the parity of the
depressed IS by creating a new mar
ket for them.
Will Accept Paper.
For the first time in history the
government will accept prime com
mercial paper as security for deposits.
This privilege will be granted, the
secretary announced, in order to make
these special deposits available to
banks on security readily within their
reach.
The commercial paper submitted"
Mr.. McAdOo added, shall first be
passed upon and approved by the
clearing house committees OF the cit
les in which the bank offering such
paper may be located. All CONNER
cial paper and bonds must finally be
passed upon and accepted by the sec
rotary"
Approved commercial paper will be
accepted as security for the deposits
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 is now
in progress, and where the demand foI
money for moving the crops most
! conveniently can be met. The secre-
tary said it would not be practicable
TO scatter the deposits among the
smaller cities.
The banks will be required TO return
the money to the public treasury
when the crops have cen moved. The
present suggestion is, Mr.. McAdoo
said, that Is per cent. be repaid in
December, 80 per cent. in January,
so per cent. in February and 20 per
Ecent. in March.
Steps are now being taken TO
carry out the plan" the secretary
added. so that the funds may be
promptly available for the movement
of the crops"