The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-10-07
Big BANKS BOARDING
TOO, SAYS M'ADOO
Accuses Them of Charging En-
cessiye Interest-Attacks
Corporations Also.
PUNISHMENT Is PROMISED

wAeprSGroS oct 6-Stcretary NJ the
Treasury McAdoo renewed his attack to-
dav upon high interest rates and reserve
percentages He issued statement say
ing that he had long lis. Of banks when
had been found guilty Of boarding money
and restricting creditors. which would be
published II the situation fails to mend
itself.
Mr. McAdoo said that reports from the
c.ntrsl reserve cities had established That
hanks in each of them have charged
excessive interest. although only In ex-
cen,ional cases. lie said. however, that
No would not issue new blacklist OF
boarding banks for the present because
there are evidences that the banks are
recognizing the evil ~ III" practices OF
which they have been guilty.
The abatement declared that individuals
arJ co,noratious are boarding money as
veil as the banks Mr.. McAdoo dld not
Indicate hpwcvc.. that ne mas any Pla"
FOR attempting to force them To chinse
their policy as he has In the case OF me
national banks
"Tha reports thus far received from the
national banks In the central reserve
cities Of New York. Chicago ana 81
Louis show that banks in etch OF tne'r
cities have in exceptional cases chaiEen
tneir bank correspondents interest as hIsh
a. per cent per annum
Few In New Work.
EN- New York nearly all loans to oank
correspondents were made al the u''io' )"
rate OF 8 per cent.
"In CHICAGO he prevailing rate charged
10 bank correspondents was I per cent
although on many loans lower rate was
charged
"In 81. Louis. while the maximum rate
20 bank correspondents was per cent
che nrevailing rates were and per cent
In a faw cases loans were being made AZ
lower rates. ,
I'm Boston 3-i0 per cent. was charged
In a few cases. although the preNail'ns
rate was s per cent.
"In Philadelphia the national BANKS as
far A. heard from. report no Loans 10
bank correspondents In excess OF Per
cent.
81 have determined rot to issue for
the present any further lists OF banks
which are carrying excessive reserves ana
thereby boarding money and restricting
credits because there Is gratifying eve
dence that the unwisdom AMI snort
sightcdness Of this policy are being rtcoE-
nized and that more sensible and ''peia'
disposition IS being manifested.
81 have a long list OF banks wnich are
holding excessive reserves and ! snail not
hesitate to publish it II 1t becomes neces-
sary Or desirable IN the public interest.
Banks that are boarding money and
restricting credits are a menace TO husi-
ness 1t "a only fair TO those banks which
are granting legitimate credits that the
banlIs which are not should be exposed
70 public view. Many banks have un,t ..3j
are meeting the situation in a fne and
commentahlc spirit, but their service is
neItraliZed ~ a considerable measure by
those bank. which refuse to do their part
There Is evidence in some quarters
that individuals and corporations are
boarding money l, is just as repre-
nensibie Cor them to do so az II is for
the banks. There is no reason way people
should uot deposit money In the banks IN
The usual way and with absolute conf
dence, and there Is no reason why business
SHOULD not he conducted In a normal way.
No Need for High Rates.
There Is no justification for high in
terest rates. There e no real reason for
light money IN this country. There is an
ample supply Of money and credit II the
Iesources Of the banks are properly used.
Since my nrst statement about the
banks boarding money | have received
etters from business men In all parts OF
me country showing that commercial
credits have been restricted TO a very
great degreA. Some large manufacturing
concerns whose credit is high have told
ne of the difficulty they are having In
selling their commercial paper In the ac-
customed way. believe that business
will be beneiicially stimulated and pros
perity grcltly promoted II the banks
throughout the country will proceed To
use some of their available resources in
the purchase OF good commercial paper.
II am glad to say that there Is evil
dence OF n very considerable revival In
the commercial paper market within the