Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1920-02-02
MANY BANKS To
LOSE ACCOUNTS
Of COVE ERNMENT
Uncle Sam viii Keep Money
Deposited Only in InStitu-
tons Where u. S. BuSi-
ness Makes 1t Necessary.

fsv "oHN,No JoURNAL SPECIAL Leased wisai
Washington, Feb drastic re-
duction in the number of national
hanks designated as government
.Fepositaries is being made by the
treasury department with the re-
suit that less than 400 of the 1881
such Institutions holding federal
funds on June 80. 1919. are eX-
Tected to escape the pruning knife.
Changes IN the governments
financial situation, brought about
by wars fiscal operations, il was
said officially today, have made it
necessary to abolish hundreds of
the depositaries and revise the plan
for distribution of government
moneys among banks employed
since prior to 1912.
While the treasury Is cutting off
the inactive accounts it is also re-
ducing the balances carried by
many other banks-in all in fact,
whore government transactions do
not require the use of large sums.
Scientific apportionment," 1t is
said, will he the basis in the flu
ture for disposition of surplus
funds. Officials explained the new
policy as TO depositares would
operate SO that each bank will be
ebe to realize equal returns on
basis Of business done for the gov
ernment.
Small Accounts Cut OFF.
Included in the list of national
banks already struck off are $50
banks which had accounts of only
1000 and which were designated
as government depositaries during
the administration of Franklin Nc
Veagh as secretary of the treasury
for President Taft.
Practically half of the banks to
be deprived of government bal
ances already have been eliminated
from the rolls and outstanding bal
anCes thus have been reduced from
$52, 100000 to $4,000, 900. Off
Cials were reticent today as to the
geographical location of the de-
Lositaries cancelled.
The new policy of the treasury
Goes not contemplate disturbance
OF the present system of special de-
rOsitaries which was created as an
measure during the war.
There was a total of $3.50 of these
institutions at the first of the year.
such depositaries automatically
viii cease to function when the
period of their usefulness termi-
mates, but so long as it is necessary
to employ extraneous fiscal policies
and so long as the war program OF
financing hang over" it is under
stood the government accounts
will be retained in the specially
chosen banks.
With the establishment OF the
federal reserve banks and branches
governments payments have been
made more and more through them
and thus adjustment of the ma
tional bank depositaries therefore
represents further leaning of the
treasury on. the reserve banks in
on the nations business,
Deposits. in the national banks
pay the government only 2 per cent
but while there was a surplus of
money in the treasury, a wide dis
tribution of government funds
proved an investment. With the
war came the great bond and in
debtedneSs certificate issues on
which the government is paying
from 3R to Az per cent interest.
In Withdrawing the deposits from
inactive accounts and in reducing
the balance IN all banks in order
to meet actual requirements, the
officials pointed out,
is saving the difference in interest,