New-York tribune., 1918-03-12
Harding Confers
With Bankers on
Interest Rate Curb
Governor Of Federal Re-
serve Board Urges Coop
Grafton Of Institutions

Members of the New York Clearing
House Association ut meeting ycster-
day attended By w. p. G. Harding, gov
ornor Of the Federal Reserve Board
voted to postpone final action on The
recent resolution Of the Clearing House
Committee calling for definite limi-
tation Of the interest rate on bank de-
posits.
Resolutions offered by William
Woodward, president Of the Hanover
National Bank, condemning the recent
action Of certain local banl-s in solicit
ing deposits at competitive rates Of
interest were adopted. These resolu-
tions We're regarded as compromise
between those who gave their unquali-
fed Endorsement to the original rcso-
luton and trust company representa-
tivcs, who insisted that the plan needed
revision.
Governor Harding Of the Federal Re-
serve Board who addressed the bank
ers, said that apparently there had been
some misunderstanding over the inter
est rate matter. He explained that
his recommendations regarding the
elimination OF competitive rates OF IN
tercsJ had reference only TO those de-
posts OF clearing house institutions
known as "bank dcposts.' in other
words, balances of one bank carried
with another, and had no relation to
mercantile and trust funds. which form
large part OF trust company accounts.
In TINS connection d number Of the
trust company officers declared they
were not opposed to the Limitation Of
the rate on bank deposits. A meeting
OF the trust company members will be
hcld to-day to discuss the matter
further.
Mr.. Harding spoke for nearly an
hour on the need for all banks and
trust companies throughout the coun-
Try to cooperate in Stabllizing interest
rates so that they should not interfere
with the governments programme of
financing the war. He declared that
he did not wish to interfere in the
local controversy that has arisen over
the action Of the Clearing House COM
mlttee, and, appealing to the patriot
ism OF the bankers, called upon them
to support aAy efforts toward stability
The resolution adopted yesterday
stated:
That this association wishes to re-
cord that the general campaign for de-
posts at increasing and competitive
rates of interest, inasmuch as such
action is disturbing throughout the ma
ton and does not add to the collective
strength Of banking resources. is at
this time improper and should not be
undertaken by any institution"
The original resolution was more
specific, in that it proposed to limit
the interest rate on demand deposits to
per cent below the rediscOunt rate
of the Federal Reserve Bank on ninety
day bills. In any event. the rate was
not to exceed 3 per cent
it developed Yesterday that the move
mcnt to increase rates on deposits by
certain New York banks and trust COM
panies has not been generally indorsed
by those whom the movement was de-
signed to benefit. Numerous letters
and telegrams received here from
banks and clearing houses from other
sections Of the country show a strong
opposition TO the plan. Though they
would receive the initial benefit of a
raise OF one-half Of / per cent on
their balances in New York. out-of-
town bankers pointed out, this would
only mean that interest rates would
have TO be raised all along the line,
that they in turn 'Lould have to pay
higher interest on their own bank de-
posts and that ultimately the govern
ment would suffer in its war financing
by the higher level of money rates.