Evening star., 1934-10-02
TREASURY FIGHTS
LAZY BANK CASH
Deposit Turnover Now Half
as Rapid as 1929 and
TWo.Thirds 1923-27.
BY the Associated Press.

By the Associated Press.
The problem of jobless money, or
check books with cobwebs on them.
furrowed the foreheads of United
States Treasury experts today.
The TreaSurys own brain trust-a
group of college economists-laid be-
fore Secretary Morgenthau an impress
sive array of new statistics to show
that private capital isn't working as
much as 1t used to.
The figures dealt with the velocity
of bank deposit turnover"-that is, the
number of times dollar is deposited
and withdrawn in a given period.
After a survey the economists found
deposits were being turned over only
about half as fast as at the 1929
peak and little more than two-thirds
as fast as in 1923-l927.
This contrasts sharply with the fact
that the amount of deposits is less
than 33l3 per cent below 1929, and
is within 20 per cent of the 1928
1925 level
Turnover IL Times.
The figures. garnered from Federal
Reserve member banks, showed that
the velocity reached 19 times a year
in 1929. 1t declined to below II in
the Spring of 1888 1t rebounded to
l3 during the last half of 1888, but
and this is the thing that is making
the experts cogitate-the rise fattened
out and became a slight decline in the
early part of this year.
Velocity is word by which many
economists set great store. For in
stance, in answering inflationistS who
want more currency printed, some OF
them say that it is the velocity of
turnover that counts more than the
amount. AS for bank deposits, the
man in the street realizes, even with
out the aid Of economists, that funds
lying sluggishly in banks turn no
wheels of industry.
Make Reduction on Rates.
Several steps have been taken by the
Government in an attempt to en-
courage private enterprise. The latest
was announced last night. when the
R. F. c. said it would make a reduc-
ton in dividend and interest rates on
preferred stock and notes purchased
in banks and other financial institu-
tions to 3i2 per cent from January l,
1885, to April 1, 1899, and to per
cent thereafter.
Chairman Jones said the new rates
would apply to all such securities now
owned as we'll as purchases made dur
ing the remainder of the year.
He disclosed the R. F. C. had author
lied the purchase of stock or notes in
the amount of sl,l62. 100000 in 6,692
banks, and had actually disbursed
$500, TIA 500 to 1892 banks.
Incentive to Trust Firms.
Jones said the reduction in rates
should be an incentive to the organi-
cation of trust companies specializing
in mortgages, contributing to the ef-
fort to clear up the channels of this
type Of lending.
Another new development at the
Treasury is an announcement by Sec
retary Morgenthau that hereafter
there will not be weekly statements
showing the amounts of Government
securities the Treasury buys or sells
for its investment accounts. Instead,
there will be monthly statements giv-
ing the net amounts Of sales or pur-
chases.
Too much attention" was the rea-
son Morgenthau gave reporters. Not
worth it,
The weekly reports have been
watched closely by financial observers
particularly at times when the Gov
ernment was believed to be support
ing the market by buying its secur-
tiles.