Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1914-09-24
BANKS TOLD NOT
TO HOARD MONEY
McAdoo Threatens to Withdraw
U. S. Deposits if Exorbi-
tant Interest Is Charged.
WILL EXPOSE OFFENDERS
Secretary Urges Extension of Credit
Refuses South Crop-Mov-
ing Funds.

washington, sept Zf.-oeCTeldIS
McAdoo adopted stringent measures
( last night TO urge national banks to
extend legitimate credit and charge
normal interest rates on loans. He
| telegraphed to 10 national banks in
| the four reserve cities in the south
/ that their requests for additional crop
moving funds from the federal gov
/ eminent would not be granted at this
! time, and made il clear that his &C
| ton was taken in consequence of re-
ports of excessive interest rates and
I restriction of credits.
! In a statement made public with the
| telegram Mr.. McAdoo declared:
The reports of national banks now
being received by the comptroller of
the currency in response TO his call
| for a statement of their condition as
of Sept. IL indicate an extraordinary
boarding of money by many national
banks in various sections of the
country.
Contrary to Public Interest"
Il am astonished that so many OF
the national banks are pursuing a
course so contrary to the public in
terest and SO indefensible from any
point or view. There is neither &C.
casion nor necessity for 1t.
81 intend to begin issuing daily a
list of the banks which are boarding
money by maintaining excessive re-
serves, in order that the country may
know how they are performing their
public duties.
My purpose is to focus attention
upon the excessive reserves carried
by those banks, for the reserves indi-
cate whether the banks are using their
full resources for the relief and &C
commodation OF business in their re-
spective communities.
Says 1t Impslrs Confidence.
81 am satisfied from certain reports
which have come to me that many of
the state banks are boarding money
and refusing to extend legitimate cred
it's ! shall ask the superintendents of
banks in the various states to cooper
ate with the government by supplying
reports of the condition of the state
banks and trust companies.
THE banks that are boarding mon
ey should discontinue it. Such action,
more than any other agency. tends TO
impair confidence and injure business. /
IF all the banks of the country Will
do their duty in the present circum- Z
stances by extending legitimate cred
its. at reasonable rates of interest. the 4
most serious OF our difficulties viii 4
promptly disappear.
"The economic and financial condi- /
ton of the country is sound through /
out. The most essential thing now for 4
our prosperity is the prompt conduct /
OF business on a normal basis"
Finds Some Rates Excessive.
In notifying the 10 southern banks
of his position, Mr.. McAdoos state
ment said:
Il have decided not to deposit the
second installment OF crop moving
funds with your bank at this time.
You can, however. if you desire, with
draw one-half of the securities depos
tied by you and use them as security
for the issue OF additional currency if
you make application therefor.
Il am informed that many banks in
your state are refusing to make any /
loans for crop-moving purposes, and
that in many cases good loans are
rejected or unreasonable rates of in
terest are asked.
Il am also informed that many
banks which have taken out addition
al currency are refusing to use it in
spite of great demands for money. l
rust you are not doing this.
Threat 10 Withdraw Deposit.
Il shall withdraw all government de-
1osits from banks charging excessive
-ates of interest. or which refuse rea-
;onable accommodations. and l shall
-efuse to issue so-called emergency
currency to banks which are not max
ng use Of it on reasonable terms for
ne benefit of the business community
1T is essential in the present situa-
ion that everybody pull together in
IN unselish spirit for the good of the
Il, OF course, expect the banks to
make a reasonable charge for accom-
nodations. My point is that the
barge must be reasonable, as the CO.
Iperation and help OF the treasury will
lot be extended on any other basis"
The secretary's statement was IS
ued after the federal reserve board.
4 which he is an ex-officio member.
ad listened for several hours to pleas
or assistance from the committee of
orty' OF the Farmers Union, which
anne TO Washington to urge direct
ederal loans to cotton producers. The
ommittee was told that it was i'm
ossihle for the government TO do
rore than IL had done.