The herald and news. [volume] (Newberry S.C.) 1903-1937, 1913-08-05
TO PUT MILLIONS IN
The SOUTHERN BANKS
PLAN DEVISED TO FACILITATE
CROP MOVEMENT.
Secretary of Treasury to Ward OH
Stringency, Following Market
ing Heavy Crops.

Washington, July 31.-Twenty-f1ve
to fifty million dollars of government
funds will be deposited in the ma
tional banks of the South and West
at once by Secretary McAdoo to facili-
tate 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 per cent inter
est.
The motive of Secretary McAdoo in
establishing this new policy is to an
ticipate the money stringency in the
late summer and fall, which invari-
ably accompanies the marketing and
movement of crops, especially when
the crops are unusually large, as the
harvest now beginning forecasts He
intends to take time by the forelock
and prevent or minimize the usual
tightness Of money.
In a statement today the secretary
made the significant answer 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
taken out at least 40 per cent of their
authorized circulation,
Will Help Restore Parity.
United States 2 per cent bonds,
serving as security for most of the
national bank circulation have been
depressed recently to new low market
records, dropping to 95 3-4 during the
past few days. The secretary's will
ingness to accept these bonds at par
as security for the twenty-five to ff-
tv 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 de-
pressed Is by creating a new market
for them.
For the first time in history the gov
ernment will accept prime CONNER
cial paper as security for deposits.
This privilege will be granted, an
nouneed 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 committees Of the
cities in which the banks offering such
paper may be located. All CONNER
cial paper and bonds must finally be
passed upon and accepted by the Sc
cretary"
Approved Commercial Paper,
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 Is per cent of their market value,
The additional deposits will be plac-
ed with the national banks in the two
or three principal cities of each of the
States where harvesting is now in
progress, and where demand for
money for moving the crops most con-
veniently can be met. The secretary
said it would not be practicable to
scatter the deposits among the small
er cities, especially in view of the
character 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 cent be repaid in
December, 80 per cent in January, 80
Der cent in February and % per cent
in March next.
"steps are now being taken to car
ry out the plan" added the secretary
$50 that the funds may be promptly
available for the movement of crops" "
Names of banks to receive the depos-
its and other details of the arrange
ment will be announced later.
Fulflls Tillman'S Hope.
Just as Secretary McAdoo was an
\nouncing his plan, Senator Tlllnan'
Of South Carolina, was issuing a state
ment declaring that unless congress
acted quickly TO provide an emergency
currksey, the cotton planters OF the
sout would lose hundred million
dolla through inability to get money
to move their crops.