The Birmingham age-herald., 1915-09-21
MAXIMUM RATE OF INTEREST CHARGED
 EXCEEDINGLY HIGH
Instances Cited in Alabama. Georgia and Several Other Southern States. Practice, However, Not Confined to the South

Raleigh. N. C., September 2o.-Facts concerning high interest rates charged by national banks throughout the coun- try, particularly in the south. were dis closed by W. P. G. Harding of the fed eral reserve board. in speech tonight be- fore the Raleigh Chamber of Commerce. Mir Harding was explaining the reserve board regulations granting preferential re- discount rates to notes secured by staple commodity warehouse receipts provided the maker has been charged not more than 6 per cent interest. and defending the action of Secretary McAdoo in de- posting s15.000,00O in the southern fed eral reserve banks to aid in financing the cotton crop.
 The comptroller of the currency" he said, "has information from sworn re- ports to his office regarding the maxi mum and average interest rates charged by national banks throughout the Uni 1915, it appears that there are five na- tional banks in Alabama whose maximum rates of interest average e6 per cent, the rate in one case being 60 per cent and In another 34 per cent. The average rate of interest which one of these banks was charging on all of It's loans amounted to 12 per cent, another 10 per cent. In Arkansas one national bank admitted making a loan at a rate as high, as 120 per cent, another, one at 50 per cent, an- other at 60 and another at 35 per cent 'In Georgia there were il banks where the average maximum rate of interest was about 80 per cent. The maximum rate charged by one of these banks was 70 per cent and the average on all loans was 15 per cent. No bank In South Caro- lima admitted charging more than 15 per cent In Texas a number of banks reported rates in excess of 100 per cent and many of them stated that their av- craze rates on all loans were per cent per month or more.
 These high rates, however, are not con- fined exclusively to the south. for the reports show occasional rates of 50 per cent in the east and north as we'll as in the far west and south. Twelve per cent seems to be regarded still as not extraordinary by the country bankers of Minnesota, Wyoming Kentucky and Cali fornia. Owing either to the rigid usury laws of North Carolina or to the natural shrewdness of your citizens. the average interest rates in your state are lower than elsewhere In the south. While one bank in North Carolina admitted mak- ing a loan at as high as 30 per cent it's average rate on all loans was less than 61z per cent and the average rate for loans by all national banks In your state was slightly over per cent.'
 No Discrimination
 Mir. Harding said that Secretary McAdoo In making crop deposits in the southern reserve banks could not be charged with discrimination in favor of one section for he had offered to deposit treasury funds with federal reserve banks of other sections. which deposits have been de- clned.
 q fully agree that from purely bank ing standpoint and eliminating all other considerations. the deposits were not es- sential,'' said MT. Harding. "1'he situa- tion as banking proposition could have been cared for by the southern reserve banks, either by an expansion of their note issues or by rediscounting with other federal reserve banks, but the human equation has to be reckoned with. par ticuarly when 1t comes to to dealing with southern farmers The federal re- serve system is still new. On the other hand the farmer knows about the gov ernment of the United States.
 'Tn my opinion the secretary, who was
 (Continued on Page Ten.S