The Lancaster news. [volume] (Lancaster, S.C.) 1905-current, 1914-09-25
WARNS BANKS NOT
TO HOARD MONEY
Secretary McAdoO Adopts
Stringent Measures.
ALL MUST PULL TOGETHEI
Announces He Will Issue Daily List
of Banks With Excessive
Reserves

lend legitimate credit and charge
normal interest rates on loans. He
telegraphed to ten national banks in
the four reserve cities in the South
that their requests for additional
crop moving funds from the federal
government would not be granted at
this time, and made it clear that his
action was taken in connection with
reports of excessive interest rates
and restriction of credits.
In a statement made public with
the telegram Mr.. McAdoo declared
there was an extraordinary boarding
OF money by banks throughout the
country and piling up of reserve
without occasion. He said reports
to the comptroller OF the CURRENCY
showed money boarding has been
carried on by banks to an extreme
degree, and announced lie expected
to focus attention upon the guilty
banks by issuing a daily list OF those
with excessive reserves.
MIGHT IMPAIR CONFIDENCE.
Although the federal government
has no power over state banks or
trust companies, the secretary ex-
planned state bank superintendents
would be asked to furnish available
information on money boarding in
such institutions. He characterized
money boarding by banks as the
agency most likely to impair conf
dence and injure business.
The statement follows in part:
Il have decided not to deposit the
second instalment of crop moving
funds with your bank at this time
You can. however, II. you desire,
withdraw one-half of the securities
deposited by you and use them as Sc
curity for the issue of additional cur
rency If you make application there
for. l am informed that r'a'.y banks
in your state are refusing to make
any loans for crop moving purposes
are rejected oh AS SakCnaISe rp - Of
interest are asked. aSo an Inform
ed that manv baA;s VII Ah have
taken out additional ,rAAaey are
refusing to use 1t In spite of great
demands for money. l trust YOU are
not doing this
ALL MUST PULL TOGETHER.
II shall withdraw all government
deposits from banks charging exces-
s!ve rats of interest, or ,hlch refuse
reasonable orcoN, r,,.J,t;o,, -, r
shall refuse to issue co-called emar-
gency currency % banks which arc
not making use}of Il ~ reasonable
terms for the benefit OF the business
community. 1t is essential in the
present situation that everybody pull
together in an uns etGsh sUirit Tor
the good Of the country.
THE reports Of national banks
now being received ny the co,np-
troller of the currency in resrunse
to his call for a stetemcnt ri their
condition as of September l2. indi-
cate an extraordinary boarding of
money by many national banks.
There is neither occasion nor ne
cessity for it,
intend to begin issuing daily a
list OF the banks which are boarding
money by maintaining excessive re-
serves
The reports of national bank. are
public property anyway, and while
they have been published in their re-
spective communities. the sigrifi-
canoe OF their statements is not gem
orally understood. My purpose is to
focus attention upon the excessive
reserves carried by those hanks for
the reserves indicate whether or not
the banks are using their full re-
sources for the relief and accommo-
dation OF business in their respective
communities.
MATTER OF REGRIlT.
1T is a matter or extreme re eret
that the government has not the
power to exact similar statements
from the state banks and trust com
panies,' because / am satisfied that
many state banks and trust compa-
nies, like many national banks, are
boarding money and refusing II ex-
tend legitimate credits. / shat ask