The Columbia herald. [volume] (Columbia, Tenn.) 18??-1935, 1913-08-01
SECRETARY M'ADOO
CHARGES BANKS IN
A PLOT ON BONDS
FINANclEas coNsPlRE AGAINST
ANY LOANS AT TWO
PER CENT.
Big new YORK CONCERNS
Trying to Scare Little ones-vs,u..
Cut and an Effort Made by rhl,
Means to Affect Currency Leolsl,
ton, But Official Exposes Them

!
! WASHINGTON, July 29.-Secreta
ny McAdoo issued statement tonigb,
fatty charging that the decline .,
government 2 per cent bonds to OIL
"a new low record was due sol
most wholly TO what appears to 81
campaign waged with every indica.
tion of concerted action on the part
OF number of influential New York
City banks to cause apprehension and
uneasiness about these bonds in or.
der to help them in their efforts tn
defeat the currency bill"
Banks throughout the country own
almost entirely s73O,SS2,13O of the :
per cents. Their market value TO-DAY
was approximately $3O.OOO,OOO less
than when the banks bought them
Almost all the entire issue is used
as security for national bank notes
AT the present price, however, the
discrepancy between the market val
,ue and the issues of notes agaips,
the bonds is covered by what n
known as the per cent redemption
fund deposited by the banks with the
treasury to care for retirement Of
national bank notes.
Secretary McAdoo announced n
was his intention to require thu
banks to charge of the present de-
probation below par, but that the
banks might continue to put in the
bonds at par In their statements to
the comptroller of the currency al
least until some material change in
conditions should compel the adop
tion Of another course"
In his statement Secretary McAdoo
declared Q per cents were worth par
notwithstanding their decline IN
the New York market, and contln.
ued:
The idea seems to be that the coun.
try banks, which hold about two
thirds Of thu per cent bonds, and
use them as the basis for their c;ycu.
lating notes, may be induced to unite
with the New York City banks in CD.
position to the bill If they can be
made to believe that the proposed
currency measure is going to injure
these bonds and cause losses to the
banks. This is. Of course, unfcund-
ed.
Meantime 1t Is folloy for any
bank to sell government rs at sac
rifice because OF any apprehended
legislation adverse to government
bonds, as no such legislation will re-
suit. In the 124 years of its exist
ence the government has kept faith
seruptitiously with its creditors, and
it is not going to change its honora-
BILE character now"
The statement concludes:
I'm many quarters there is dis
position on the part of the banks to
restrict legitimate credits. There is
nothing in the situation to warrant
such course. The banks should not
put undue restraints on business.
Should any undue stringency appear,
the secretary said that 1t could east.
~ be met through the resort to the
S5O0,OO0,000 emergency currency now
held in reserve, which can be issued
II the banks need it or by use Of the
resources of the treasury department
DR. both.
In conclusion the secretary said
with emphasis that there is not going
10 be any financial trouble and that
The large crops now in prospect are
going to be moved without Difficulty;
and that the powers of the depart
nent will be exercised in their g eat.
EST amplitude for the protection OF
no hrcsroco