The Richmond Virginian. (Richmond, Va.) 1910-1920, 1913-07-29
'ADOO CHARGES
BANK Conspiracy
ON CURRENCY BILL
Depreciation Of Two Per Cent.
Bonds Due to Efforts Of
New York Banks
PLENTY OF MONEY
TO MOVE BIG CROPS
Enormous Emergency Fund
Guarantee Against Money
Stringency---Wilson Sure
Bill Will Pass

NAof1AN11ONs July ZH.-HeCrS-
tafy OF the Treasury William q. Nc
New York city banks are in a con-
epiracy to deAeat the administration
currency bill. He contended that the
depreciation OF the Q per cent United
states bonds below par 10 q result OF
concerted effort on the part of these
banks and II intended to help them
In their campaign against the cur
rency measure.
The secretary, In a formal state
ment. charged further that the in
tention Of these big New York fnan-
cial institutions is to incite the coun-
try banks. which hold about two
thirds OF the per cents into OPP
posing the administration bill, on the
ground that 1t will injure the bonds.
and 30 cause large losses to the
banks.
The issuance of Mr.. McAdoos blast
against the New York hanks caused
. stir in ofsic!al circles here tonight
There was q tendency here to re-
gard the McAdoo statement a. hav-
inG been issued very much In the
same spirit as was President Wilson
statement en- the lobby, which re-
suited In the Investigation b hrduf
mitfee OF the senate. and many dis
closures.
Congress May Investigate.
X 10 believed that Mr.. McAdoo's
statement will lead 10 q congressional
inquiry into the alleged conspiracy.
Mr.. McAdoo. IN his statement. said:
Tho secretary has heen asked II II
II the purpose OF the department to
call on the national banks for add
tionAl security because the per cent
6ondN are selling below par.
The secretary raid that while the
law conferred that discretionary
power on the comptroller of the cur
rency II is not his Intention TO re-
qufre the banks TO charge of the
present nominal depreciation below
par of the per cent bonds. So far
a. the department In concerned. the
banks may continue to return the
per cent bonds At par in the state
ments they make to the comptroller.
material change In conditions should
compel the adoption OF another
course.
.sThe idea seems to be that the
country banks. which hold about two
thirds OF the per cent bonds. and
use them AZ the basis for their cir
cuiating notes. may be induced to
unite with tho New York city banks
In opposition to the bill II they can
currency measure Is going to injure
these bonds. and cause losses to the
hanks This IL, Of course. unfoundcd.
Amendment Increased Bonds' Value.
1.-THE secretary .said that not only
had nothing occurred to impair the
value OF the ? per cent bonds. but
that the amendment already adopted
by the Barking and currency com
mittee Of the house enhances their
sntrinsic worth.
1.-THE secretary spoke with amuse-
ment OF the grave statements sent
out from New York TO the effect that
II the currency bill shall pass and
government depceits are put in the
federal reserve banks the . per cent
bonds now used to secure deposits
will be thrown on the market and
their value thereby impaired. A. on
" $4,000. 900 of the two's. out OF
total OF sra0,ss2.ls0. are used TO Sc
cure government deposits, 1t can be
readily seen how trivial this II.
Nearly all OF the two's are owned
~ the banks. II the price II marked
down II IL because the banks them
selves are putting pressure on the
market. and depressing the value OF
sheir securities The fault Is their
avn.
sThe department has, because OF tn
relations to the banks. and Its neces-
sArily important part In the financial
Affairs Of the country, a deep inter-
Ell IN the welfare Of the banks In the
stability OF tho financial situation. and
In 4 continuance Of the prosperity
nov attaching to agricultural and
Industrial enterprises and general
business
Money stzingency Improbable.
FOR these reasons tho secretary
lid he hoped thAxs tkA banks would
not consider 4 suggestion from him
tmpertinent In many quarters there
Il disposition on the part OF the
banks to restrict legitimate credits
There ID nothing In the situation t.
warrant such 3 course. The banks
should not put undue restraints or
business. Should any unusual strtn-
HNncy apnAAr tina aecretAry said Y
could easily be met through resort
% the $500, 100000 stringency cur.
rency now held In reserve. which
can be issued II the banks need It
or BY use OF the resources OF tht
treasury department, or both.
In conclusion. the secretary said
1ng to be any financial trouble. and
that the large crops now In prospec,
are going TO be moved without dif.
Aculty. and that the powers OF thu
department. will be exercised In theil
oreateat amplitude for the protection
Il pf the businem interests OF the coun.
n.y..
M. McAdoo tonight would add
nothing 10 his statements for the pur.
80 of~indicating the nature Of thu
evidence on which he had based hi,
EsHharoo.
ii President Wilson had confsrSncea
|8xoAAY with Deuator Owen and Rep
atative 0lasA IL cAaiEmen AZ ~
~ = - AZ 1eestopS1 ena& III