The Brattleboro daily reformer. (Brattleboro, Vt.) 1913-1955, 1914-10-03
NOT BOARDING MONEY.
Vermont State Banks Meeting Reason
able Demands for Loans.

o-1C AS4A11AANA AOA 1OoAo'
NEWPORT, Oct. ). - The cores
pondence relating to alleged boarding
of money by banks has been given out
by State Bank Commissioner Williams,
who replied to Secretary McAdoo 5
telegram of Sept. -.
Mr.. McAdoo teIegraphed as follows:
Washington, d. c., Sept. 81, 1914
Frank G. Williams, bank commissioner
Newport, Vt.
Reports now being received by the
comptroller of the currency from ma
tional banks throughout the country
indicate that money scarcity is being
occasioned in large measure because of
the boarding of funds by many nation
al banks which are carrying reserves
in some cases two or three times as
great as required by law and also that
credits are being restricted and excess
sive rates of interest are being charged
TO customers. There is at this time
more currency in the country than at
| any time in its previous history. There
have been issued through the treasury
department since Aug. more than
$500, 100000 Of additional national
bank currency, which, together
with the relaxation in business
should create an abundance of loana-
bic funds. This department will with
draw government deposits from banks
| found to be boarding money and
| charging excessive rates of interest,
and will re-deposit them with banks
whose funds are being loaned at rea-
| sonable rates to meet the legitimate
| demands of business and for moving
| the crops. This department would like
very much to have your cooperation
! in its efforts to remedy these unsatis-
| factory conditions and respectfully asks
if it would not be possible for you to
secure from all state banks and trust
companies in your state, statements
/ which Will show their cash reserves as
| of a recent date, the rates of interest
which they are charging on existing
loans and the rates which they are de-
handing for new accommodations and
give this department the benefit of
the information disclosed by these re
ports. 1t is confidently believed that if
all banks can be persuaded to use their
resources intelligently and considerable
~ and at reasonable rates of interest
| to meet the legitimate demands in
their respective communities, the whole
situation can be greatly relieved and
business restored to n satisfactory if
not an entirely normal basis.
Kindly answer,
". G.. McAdoo,
Secretary of the Treasury.
Mr.. Williams replied as follows:
Sept. %, 1914.
Hon. w G. McAdoo,
Secretary of the Treasury,
Washington, ID. c.
Dear Sir:-Your telegram of Sept.
p came while ! was away on a reg
ular trip of examination of the state
banks of Vermont.
On Aug. % i sent to all the state
banks of Vermont a circular calling
their attention to the financial situa-
ton, urging them to furnish all the
money needed for legitimate business
needs of citizens of Vermont, and ask
ed them not to loan money to speculate
in stocks Since that time | have made
a weekly call upon all the banks and
an examination of their reports, with
the information which | have received
directly from the officers of the banks,
personally, shows that there has been
no boarding of money by Vermont
state banks during the past two
months. and that they have met all
legitimate demands for loans by citi-
zens of Vermont, with the possible ex-
ception Of a few large loans to manu-
facturers and dealers who have pre-
j viouslv borrowed of Boston and New
York banks. Some of these manufac-
turers and dealers have been refused
the usual accommodations in those
cities unless they would pay seven or
eight per cent for the money, and they
have asked Vermont banks to accom-
modate them which has been done in
nearly every case so far, at six per
cent and in fact, the state banks of
Vermont so far as | have been able TO
learn, have not increased the rate to
borrowers since the European war be
gan, and the maximum rate here has
been and is now six per cent.
Yours truly,
(Signed.) f. c. Williams.
Bank Commissioner.