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302 x.,. 793 For release in morn~ papers of Wednesdaft ~~rch 13, 1918. STATifMEN'T FOR THE PRESS • The Federal Reserve Boa~d today sent the foll~ing teleg~ to the Chair.men of the B~rds of the Federal Reserve Banks: · 11 l3oard is anxd>uus to have you watch sit~Hon in your district with respect to competition for deposits through advancing interest rates, with view of getting banks contemplating advances to defer action and of inducing these who are Pfi'.i~ n1ore tha.n normal rates to reduce them. feels that Government financing should. ~ve Board right of way and that reserve streng:ib of banks would be increased by encoura-ging the public to invest in Treasury certificates of indebtedness and Libarty bond issues ratber t ha.n by banks campeting for these funds and thus necessitating heavy investment in these securities for their own account, issues is n1ost important.. Wide distribution of Government Deposits thro-ughout the co'Wltry show general ten- dency t9, increase in volume and there seems to be no good reason to increase rates of ht erest paid for them, thus adding to cost of money. Tra-nsfer of .balances from one bank to another does ncllt add anything to the strength of banking position BDs a whole. of this question.. Board urges that ~rQad national ttew be taken In view of approa.ching Liberty bond campaign, sharp, nation wide contest berween banks for deposits would be particularly unfortunate~ New York Clea.ring House yesterday 'Ullallilnously adopted thi.s resolution: 'Resolved• t:bat this association wishes to record that any general cam- paign for as such d~osits a~tion at increasing and competitive rates of interest i~smuch is disturbing throughout the ration and does not add to tre collective strength of banking res~rces 1 is at this t~e ~proper and should not be 'Undertaken by any institution. I It is e.x;pected tba.t New York Clearing House will reach definite agreement within next ten ~ys or two weeks' In meanwhile interior banks are advised against ba.s.ty and ill considered action .. Please bring this telegram to the attention of ~s view of ascertaining their views and of enlisting in your 4istrict with their. cooperation. HARDING. "'
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