Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1920-02-02
HUNDREDS OF BANKS
| LOSE FEDERAL CASH
Drastic Reduction Results in Less
Than 400 of 1881 Holding
Deposits.
WAR PARTLY RESPONSIBLE
Scientific Apportionment Is New
Policy Adopted by Treasury
Heads.
WAR PARTLY RESPONSIBLE
[Ry Associated Press.1

WASHINGTON, Feb. 1.-Drastic re-
duction in the number OF nationa,
banks designated as government de-
positories is being made by the Treas
ury Department, with the result that
less than 400 of the 1881 such ins,i-
tutions holding Federal funds on June
80. 1919. are expected to survive tho
pruning knife.
Changes in the governments finan-
ciai situation. brought about by war,
fiscal operations. it was said oficfaIIv
today, have made it necessary to abol
ish hundreds OF the repositories and
reFse the plan for distribution or
government moneys among banks am
pioyeu since prior to 1912.
Cut on Inactive Accounts.
While the Treasury is cuttinr or
the inactive accounts. ii also is redSr-
n,S. INK the e, pa balances nee carried. by many
government transactions do not re-.
quire the use of large sums
viii 1eient,ne ha inc 4, apportionment," it. is said.
position of surplus funds. Officinls eS-
plained tho new policy as to deposi-
wi,l ,SrieS h would hS operate SO that eacR bank
on a basis OF business done for thS
government, oi tao
Included in the list of national banks
already struck off are 56G banks Which,
had accounts OF only $1,000, and whici,
were designated as Eovernment Iet
Positories during the administration OF
Treasury for President Taft. u 'no
= princticalty half OF the banks to be
pepT,ved repdw h,y OF GOV government balances al
Ie1uy haye been eliminated from tho
rolls, and outstanding balances ,Ims
Haye ss4 eodee been reduced from $4,000, 900 to
Sif SGif"gSeooGi 3Se o,,, Other banks viii be taken
other accounts will be reduced untii ntI
ny nS me enc OF tho calendar year II is
opHGltea eomnleiad the og new policy Will be fully
day day as to the geographical iocat ton Of
the repositories Cancelled
not ne contS new Sy p9iiey Of & the Treasury docs
pr,essnt i,e; system OF special repositories.
,',! WHEN was created as an emergency
1I'ensIIe n ista "a dueng nEo the war. There was
at the first of the year. Such d"nos
tories automatically will cease 10
fuIness tsrmin5i.s %neh the period of their use-
ID, - hece,SSsary to employ extraneous fis-
Gnt nro poiieieS; ran s. and SO long the wa
It o IS rum understond a managing Gins hangs over
counts will be retained in the sncciaiiv
chosen banks, ny
Mnke Use of Federal Reserve.
] me monetary operations of the gov
through the subtreasuries ana n,tjnnayS
bank depositories prior to tho rrsat;n,,
tho 1b me ne nederal h,is reserve system. With
Oh Inc Federal
, Serne banks and branches, government
payments have been made mora nph
more through them. and thus aboI;sy,
ment OF the national bank depositnriss
therefore, represents "a furthar 49,
ing or the Treasury on the reaor
business. hations
Deposit. Pay Per Cent.
Deposits In the national banks n. :.
,e. .ne government only per cent. hi,
mmh!ie " 1here was a surplus of mone~
~ fmc nc treasury, wide distribution az
Mtr CAME the great bond and indeht.
cuness certificate issues. on which ~,
government is paying from ST. ~
i3-i per cent interest In withdrav.
ing the deposits from inactive nnnnn,
ana in reducing the balances ~ a;I
banks in order to meet ncfn.i "a a.
Quirements. the government nf1i,inI nI
pointed out. Is saving the diffnrcnra
in interest. iicrehce
Since the Treasury began ana,vztrr
me me question OF repositories, and sjncs
SSoserhinent accounts have been with
,n wa WI ono by one. officials have begun
IN, 20 receive many inquiries, and natu
,"us LILY some protests concerning the new
noiicy' There still are in Congress-
many many Senator'S and Representatives
positor'cs were designated. and ,has.
are very solicitous about tba ,ni .nsss
back home" Treasury oftlciaIs said
There also has come from sror,s ~;
Stafo officials inquiries as TO Tho a;o
nincancc OF the withdrawal of ac
counts from banks in various sec,inn,
or the country, sectiois