The Bennington evening banner. (Bennington, Vt.) 19??-1961, 1913-08-01
FEDERAL FUNDS TO
ASSIST IN CROP
HARVEST
Nc Adoo Will Deposit, Millions in
Banks West and South
ACCEPTS BONDS AT PAR
Commercial Paper VIII Also Be Rec
ognlzed as Collateral for
Deposits

Washington, Aug. between $685.
600 600 and $50, 600, 600 of government
funds will be deposited in the nation
al 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
collateral paper will be accepted as Sc
curity for the money, upon which the
banks will pay 2 per cent interest.
The motive of Secretary McAdoo in
establishing this new policy Is to an
ticipate the money stringency in the
late summer and fall, which invariab-
ly 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 at Washington last
night the secretary made the sgnifi-
cant announcement that government
bonds would be accepted at par as Sc
curity 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 au-
thoriZed circulation. The United
States per cent bonds, serving as
security for most of the national bank
circulation, have been depressed re-
Gently 10 new low market records.
dropping to 50 "a during the past few
days. The secretary's willingness to
accept these bonds as far as security
for the S25,000,0 to $50000,000 of
promised deposits and the induce
ment to the national banks TO in
crease their circulation up to 40 per
cent limit is expected to help in re-
storing the parity OF the depressed
2's by creating new market 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. The commercial
paper submitted" added Mr. McAdoo.
shall first be passed upon and ap-
proved by the clearinghouse commit
tees OF the cities in which the banks
Offering such paper may be located
All commercial paper and bonds must
finally be passed upon and accepted
by the secretary" Approved CONNER
cial paper will be accepted as securi-
ty for the deposits at 90 per cent of
its 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 in each of
the states where harvesting is now in
progress and where the 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 return the
money to the public treasury when
the crops have been moved. The pres
ent suggestion is. Mr.. McAdoo said.
that Is per cent be repaid in Decem-
Der, 30 per cent in January: 30 per
cent in February and IS per cent in
March next