The Washington herald., 1913-06-02
FEDERAL FUNDS
EAGERLY TAKEN
Only Seven Banks Refuse to
Pay 2 Per Cent Interest
Required by McAdoo.
NOW $50 DEPOSITARIES
Ten Millions Given Out by Treasury.
Banks Of the District Of Colum-
bia Get $4,000.

Secretary McAdoo said yesterday, in
reference to his recent order requiring
the national banks to pay interest at the
rate Of 2 per cent per annum on govern
ment deposits, beginning June 1, that
there were $50 active depositary banks
on May !. the date Of the order. and that
OF these there are only seven who have
oechned to pay the per cent interest
which will hereafter be required by the
Secretary of all government depositaries.
ot the seven banks unwilling to pay
interest are the Chemical National Bank,
OF New York City. which explains that II
never has paid interest on deposits OF
any kind since the organization of the
bank, eighty years ago, and the directors
are not prepared to change the policy
now; the National Bank of Commerce,
and the National City. Of New York; the
National Bank Of Commerce, Of New
London, Conn: the Merchants National,
Of Savannah; the First National, of Buff
falo. Wyo.: the Seaboard National, of
San Francisco
The deposits surrendered by the seven
different banks are being distributed to
other banks throughout the country. in
addition to the sl0.G0oo0o which has just
been allotted to them.
Besides Withdrawing the government
deposits from the seven banks retiring
as depositaries. the Secretary has also
reduced the deposits in a number of
other banks, which. at the close of the
last administration. held amounts which
seemed 10 be excessive or unjustified, the
reductions in most cases being made
against the protests of the banks, who
desired to retain the funds, notwith-
he MT
Secretary McAdoo said that the allot-
ment among the banks of the $1,000. 900
of new money, which he stated in his
announcement of May l would be de-
posted with the banks, has now been
made. In determining the distribution
the department took into consideration
the following factors:
Population OF each State.
The total capital and surplus OF the
national banks in each State.
The needs of the several sections as
indicated by the last report of the banks
10 the Comptroller of the Currency.
The outstanding circulation OF these
banks, giving preference, as a rule. 10
those banks whose present circulation
amounts 10 not less than 10 per cent OF
their outstanding capital.
The total funds now distributed have
been apportioned among e0I national
banks in as cities and towns in forty
eight States and in the District OF Co.
lumbia-
Ranks Commend Action.
The Secretary states that various banks
in different sections of the country, IN
expressing their Willingness to pay the
interest charge. strongly commenoeo IN
their communications the wisdom ana
fairness Of the administration new
policv in imposing the charge, although
il necessarily reduced their profit. Few
II anv. OF the applicants received the
amount OF deposits asked for. Applica-
tions from individual banks for funds to
he apportioned were in some cases for
81 COZ. 90 or more. Requests received from
the largest banks in Boston and Chicago
were for 100000 each.
OF the 607 banks in which the $lO,Oo,Ooo
fund is being deposited, IA were already
government depositaries: the remaining
aS3 banks are now designated for the
first time as active depositaries. Some
OF these 433 banks, however. had been
previously known as inactive de-
positaries, holding only a nominal bal
ance.
The largest amount awarded to any one
State was to Pennsylvania, which re-
ceived Sl,l46,0OC, distributed among nfty-
six banks in forry-four cities and towns.
New York State received $4,000, appor-
toned among twenty-seven banks IN
seventeen cities and towns. The State
receiving the next largest amount was
Illinois. which received $sss0o0, divided
between thirty-one hanks in twenty-one
cities and towns Oklahoma Jared best
of the Western States. receiving $4,000,
divided between twenty-four banks in
twenty cities and towns. In the South
ern States Texas leads with Si56,000, ap-
portioned among twenty-five banks in
twenty different localities. These appor-
tiunments were all made upon the prin-
ciple announced, namely. population.
capital. and surplus of the banks and
needs of the respective sections of the
country as indicated by the Comptrol-
ler's reports, and the circulation status
of the banks.
The District is awarded $4,000. deposited
in fNrn hanks