The Forest Republican. [volume] (Tionesta, Pa.) 1869-1952, 1913-08-06
NATIONS FUNDS
TO MOVE CROPS
MCAdoo Ready to Send Millions
to West and South
COMMERCIAL PAPER SECURITY
Secretary Of Treasury's Order Means
That Government viii Establish
Precedent In its Financial Policy.

- ~"
Precedent In its Financial Policy,
Twenty-Five to fifty million dollars
Of government funds will be deposited
in national banks Of the south and
west at once by Secretary McAdoo to
facilitate the movement OF crops.
Federal, state and municipal bonds
and prime commercial paper will be
accepted as security for the money.
upon which the banks will pay 2 pei
cent interest.
The motive of Secretary McAdoo In
establishing this new policy is to
anticipate the money stringency in
the late summer and fall, which In
and movement OF crops, especially
when the crops are unusually large 40
the harvest now beginning forecasts.
He intends to take time by the fore.
lock and prevent or minimize the
usual tightness of money.
In a statement the secretary made
the significant announcement that gov
eminent 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
taken out at least 40 per cent OF
their authorized circulation.
The United States 2 per cent bonds,
serving as security for most OF the
national bank circulation. have been
depressed recently to a new low mar
ket record, 95&, in the last few days.
The secretary's willingness to accept
these bonds at par as security for the
20 to so millions Of promised deposits
and the inducement to the national
banks to 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.
For the first time In history the
government will accept prime com
mercial paper as security for deposits.
This privilege will be granted, an
nounced the secretary. in order to
make these special deposits available
to the banks on securities readily
within their reach.
1.-THE commercial paper submitted"
Mr.. McAdoo added, 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 CON.
mercial paper and bonds must finally
be passed upon and accepted by the
secretary"
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 cen of their market value.
The additional deposits will he
placed with the national banks in the
two or three principal cities in each
of the states where harvesting is in
progress and where the demand for
money for moving the crops most con
v~eniently can be met. The secretary
said it would not be practicable to
scatter the deposits among the smaller
cities, especially in view or the char.
acter 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 CEN be repaid in
December, 30 per cent in January, 30
per cent in February and rs per cent
next March.
"Steps are being taken to carry out
the plan," the secretary added, so
that the funds may be promptly
available for the movement of the