Evening star. [volume] (Washington, D.C.) 1854-1972, 1915-08-31
INTEREST ON COTTON
FUNDS NOT CHARGED
Reserve Banks Get Government De-
posits Free Without
Opposition.
Grain Men May Ask for Similar Aid
When Their Great Crop
Is Moved.
BY I. A. FLEMING.

BY l. A. EIEM1NG.
The action of the Secretary of the
Treasury in promising to deposit GER
tain moneys in the regional banks OF
the south. without interest, as relief
measure in the handling of the cotton
crop. has called forth some objections
on the ground that the government has
eXacted interest from national banks
and that the reserve banks should also
pay interest
The federal reserve law contains no
provision either for or against the pay
ment of interest on deposits by tho
government The matter is one to be
settled by the Secretary of the Treas
ury, in the exercise of his discretion
airy powers
1t is not probable that national banks
in this district which are government
depositaries would offer the slightest
objection to the non-payment of IN
terest on the cotton funds. The less
cost to the regional banks, the more
profit; and the more profit the better
the chances of the banks that are men,
bers of the system for receiving their
+ per cent per annum on their stock
Investments.
members of the Dallas and Atlanta re-
gionaI banks have the same interest in
the dividend returns.
The three southern regional banks
profit if no payment of interest is nee
essary on the millions deposited by the
government, but they would also be
forced to exact a much higher rate OF
interest than the going rediScount rate,
in the event of being compelled to pay
the government per cent interest for
the funds. The entire relief fund could
he used with profit to the regional
banks. but the borrowers, the bankers
of the south, would be able to make
more generous rates to their borrow
ers. the cotton planters and warehouse
men.
1t would seem that it would make but
little difference to the national banks
which act as depositaries of govern
rnent funds in the northern states, be-
cause they will not be brought into
competition with the southern bankers.
In the House draft of the federal re-
serve bill it was provided that the Sec
rotary of the Treasury should deposit
all government general funds in the
reserve banks, within one year from
date of inauguration of the system, to
be distributed equitably by the reserve
board among the regional banks. with
the understanding that no regional
banks should pay interest upon any
except upon government deposits.
This clause was stricken out in the
bill before it became a law, leaving it
optional with the Secretary of the
Treasury. and also leaving it within
the possibilities for other reserve banks
The Secretary of the Treasury an
nounced some time ago his intention to
withdraw ultimately all moneys from
government repositories and redeposit
them with the federal reserve banks.
May Aid Wheat Crop.
There is another phase to the PROPOSE
tion to deposit government money in
aid directly of cotton. 1t is within the
hot
banks Of the northwest and central
western districts may call upon their
regional banks for assistance in the
movement Of the crops-the billion
wheat yield and the great harvests of
other crops. In return the regional
banks of the reserve system in these
sections may appeal to the Treasury
Department for deposits of government
funds, without interest. and the depart
ment might be forced to yield under
the fear of being charged with favor
itism for sectional interests
1t Is within the possibilities that the
treasury department may, in deposit
ing government funds in southern
with the federal reserve board as to the
exact rate that the member banks are
to charge their customers, apart from
the prevailing rediscount rates, as an
inducenent for the deposit of the gov
eminent funds at a low rate of inter-
est. Some such action has recently
been taken by Treasury officfals with
reference to other funds, and it might
ance with good results for all con-
cerned.
When Lanston was called on the local
stock exchange the first bids were at
70. yesterdays figure. and they were
gradually advanced fraction after frac-
lion to IS and to 7S%. with holders
asking S314. With the bid at so. trans.
actions were made for fifty shares. and
more might have been sold. Rumors
Of new business being booked by the
company continue on the street, and the
recovery in the price would seem to
confirm the stories. although there are
yet several points between the high
Of today and the high before the recent
drop. S3tz.
The rest OF the market was slow,
some little bidding and offerings on
small lots of Graphophone preferred
and a few other stocks, but no other
The bid on Washington Gas was
raised a point from the 20 of yestec-
day to IL.
A small Capital Traction 5 per cent
bond sold at 106A.
Financial Notes.
June was the record month in iron
and steel exports. the total of s32,1s4,0oo
being over 100000 in excess of tho
total of exports in May. 1912, the previous
record month.
Dividend meetings last week produced
10 changes worthy Of note Extra dis
1ributions were made on Atlas Powder
and Du Pont Powder common stocks
II Is stated that the United States Steel
Company could handle 100000 900 of
war orders. but that Judge Gary and J.
y. Morgan have decided not to accent
any direct orders for these supplies
The Continental-commer National
Bank Of Chicago predicts billion
oushel wheat crop. adding 5000 900
bushels additional, this being tho first
'iine IN the history of the country that
the billion mark has been reached.
Predictions are. for corn, 2es30oo. 600
bushels: oats. 49,. 900 900 bushels: rye
500. 900 bushels: barley 2o4 600 900
bushels: hay, 100000 tons, and cot
ton. 10000 900 bales
So far this year Canada England and
France have sent Sls5.000,000 of gold TO
this country.
In some southern cities jitney owners
have undertaken consultations and Of
Tered stock, par value. $40 share with
five -doliar book of jitney tickets al
bonus. Some stock speculation.
Condition of the Treasury.
The condition of the United State.
Treasury at the close of business yes
terday was:
Net balance in general fund, s52,723.-
142
Total receipts, Sl,4ss52o
Total payments, S2.12s,427
The deficit this fiscal year is $2s2l7-
'I5 against deficit OF sl5,6Gs. 1903 last