Highland recorder. (Monterey, Highland County, Va.) 1877-1972, 1913-08-08
u, S, FUNDS
70 NOW: CROPS
GOYeTnlIl;At 10 Lend Banks In
South aat West millions.
TO ANTICIPATE STRIhGENCY
Government Bonds and Prime Com
mercaI Paper to Be Accepted as Sc
curity-Tiilman Sees a Crisis.

mercial Paper to Be Accepted as Se-
curity-TiIman Sees a Crisis.
twenty-five to fifty million dollars
OF government funds will be deposited
in the national banks Of the south and
west a; once by Secretary McAdoo to
facilitate the movement of crops.
Federal, state and municipal bonds
aud prime commercial paper will be
t.~ceytel by the government as secur-
! ity for the money, upon which the
banks will pay per cent interest.
The motive of Secretary McAdoo in
, establishing this new policy is to an
tjcipate the money stringency In the
| late summer and fall which invariably
accompanies the marketing and move
ment OF crops, especially when the
crops are unusually large, as the har-
veqt now beginning forecasts. He In
, tends to take time by the forelock and
! prevent or minimize the usual tight
meas OF money.
In a statement the secretary made
the significant announcement that gov
ernment bonds would be accepted at
par as security for the new deposits
and that the additional money would
be placed only with banks which have
take nout at least 40 per cent OF their
authorized circulation.
The United States per cent bonds,
sarving as security for most OF the ma
tional bank circulation, have been de-
pressed recently to new low market
records, dropping to 95A during the
last few days The secretary's willing
ness to accept these bonds at par as Sc
curity for the twenty-five to fifty MIL
lions Of promised deposits and the In
ducement to the national banks to In
crease their circulation up to the ~
per cent limit Is expected to help IN
restoring the parity o fthe depressed
Is by creating new market for them.
For the irst time in history the gov
ernment will accept prime commercial
paper as security for deposits. This
privilege will be granted, announced
the secretary. in order to make these
special deposits available to the banks
on securities readily within their
reach.
The commercial paper submitted"
added Mr.. McAdoo, shall first be
passed upon and approved by the
clearing house committee of the cities
In which the banks offering such paper
may be located All commercial paper
snd bonds must be finally passed upon
and accepted by the secretary"
Approved commercial paper Will be
accented as security for the deposits
at S5 per cent OF It's face value, and
high class safe, municipal and other
bonds, exclusive OF government bonds,
1T Is per cent Of their market value.
The banks will be required to return
the money to the public treasury when
the crops have been moved. The pres
cnt suggestion IS, Mr.. McAdoo said,
that IS per cent be repaid in Decem-
E.r, 80 per cent in January, 80 per
cent in February and rs per cent in
March net.
IS: cps ae now being taken to carry
oui the pl-n," added the secretary,
; $50 that the funds may be promptly
available for the movement of the
crcHS."
The na,res Of the banks to receive
The deposits and other detaids OF the
arrancement will be announced later.
Before he had heard Of Secretary
McAdoo's action, Senator Tfllman, in
a public statement, said that unless
congress provided relief within sixty
days southern cotton planters would
"be robbed Of a hundred million dol
lars or more" because Of the inability
Of southern bankers to get money from
New York pirates"