HOARDING MONEY.

Press, Volume L, Issue 15121, 10 November 1914, Page 8

HOARDING MONEY.

TIMOROUS AMERICANS

(from omt own coreespoxdent.) SAN FRANCISCO, September 13. The hoarding of money by banks, corporations and individuals, and the charging of exorbitant rates of interest since the war in Europe started, is charged by Secretary of the Treasury McAdoo. In Ms statement covering the jnatter, Mr McAdoo named 247 banks operating under Federal dharters, in all sections of the country. He not..only them of hoarding, money, and severely criticises them therefor, but is refusing to deposit Government money in these institutions. Moreover, he has already withdrawn some £600,000 of Government deposits from Kuch banks and deposited it with other banks that have not been guilty of offending. Undoubtedy the war situation has disturbed many timorous people, and during the week after the outbreak of hostilities scores withdrew their deposits from savings and other banks and placed them in safe deposit vaults. A continuance of such tactics would of course cause another panic, probably worse than that of 1907, and itf is to prevent such a contingency that Secretary -MeAdoo is expressing himself so freely about and their depositors. "There is no reason," he states, "why people should not* deposit in the banks in the usual way, and with absolute confidence, and there is no reason why business should not be conducted in the normal way It is just reprehensible for corporations and imu ; duals to hoard money as it is for the i);;nks to do so." • As an instance of a frightened bank hoarding money, the case of a New York institution in a prosperous manufacturing community is cited. This bank has cash on hand amounting to 61 per cent, of its deposits. The establishmment of the reserve bank system, now in course of inauguration, will probably put an end to the evil Secretary McAdoo decries. Tho individual" banks then will have tho lesson of standing" together instead of each trying to protect itself at tho expense of tho others. It will be impossible for them to draw down their reserves in a panic, and the danger of runs by banks rather than by private depositors, will be removed.