The morning news. [volume] (Savannah, Ga.) 1887-1900, 1897-09-23
AN ELASTIC BANK CURRENCY.
DEPUTY CONTROLLER COFFINS
PLAN FOR THE SOUTH.

~, would Have Southern Banks Is
Their Capital in the Cotton Season.
The Demand For Cash in the South
Causes "a Rise in the Rate of Inter-
cst-The Amounts borrowed by
Southern Banks in New York For
Ten Years.
Washington, Sept. 22.-Deputy Controller
Of the Currency Coffin. in discussing the
recent advance in money rates in New
York. said this morning:
Some of the recent sharp advances in
rates of interest on demand loans in New
york is no doubt due to speculative ma
nipulation of the stock market, but
think the impulse to this upward turn
has been given by the heavy Withdrawals
Of funds for the legitimate purpose of
moving the cotton crop to market.
AS a resident of South Carolina, IA
miliar with the movement of this crop,
have for years observed its effect upon
national bank statements. as well as on
the money market in New York, during
the month of September. AS rule the
rates Of interest advance about this time,
and in some years have approached the
danger line, and while the movement of
the wheat and other great crops has con-
trbuted to this effect, still I think the
movement of the cotton crop has been
the main factor for this reason.
1.-THE average value of the cotton yield
is about $SoO,000,OOO and it is practically
marketed between Oct and March l, or
within a period of five months, but it is
peculiar in this respect, that only about
one-ninth of the entire crop, when this is
100000 bales, remains in the section where
il is grown. OF the remaining eight
ninths, about 100000 bales are shipped
north, where it is manufactured, while
about two-thirds of the entire crop are ex-
ported from the United States
The rapid removal of so large a pro-
portion of this great product within so
short a period of time requires a large
amount of actual currency, for most of the
cotton is paid for in interior towns at the
south with spot cash. AS the. cotton-grow-
ing region is not denseIy populated the
accumulation of banking capital there is
not sufficient to provide the enormous
amount of money needed for few months
to move the crop, and for this reason the
southern bankers have to borrow largely
from banks in other sections during this
crop period. This is reflected in national
bank reports for the past few years by the
following figures, showing the amount of
money borrowed by national banks in the
distnctVely cotton states of North Caro-
lima South Carolina, Georgia, Alabama
Mississippi LOUISIANA, Arkansas and
Texas, at dates in each year approximate
ing Oct. l and March l:
Oct 8 1887 s 6,ss5, 600 Sept 80, 1892. 1o,s4s 900
Feb "A, 1888 1873, 600 Mar. 6, 1885,. s 4,725. 900
Oct. 4. 1888. $685., COO Oct. g. 1888. u 951 600
Feb Is, 1889 1731 900 Feb. 2S, 1894 1874, 900
Sept 80, 1889 9257, OOOOct. 2, 1894. Il Ill, 900
Feb o. 1880 21S1, 600 Mar. 5, 1885,. 2761, 900
Oct. ?, 1890. 45S4, 600 Sept. 2S 1895 10S03, 900
Feb %, 1891 554S.OOol Feb. %, 1896. 4O16, 600
Sept % 1891 Is, 559, 600 Oct 6, 1885, II O9S, 900
Mar. l. 1892 1921 600 Mar. g. 1897. 1885, coo
When the borrowings of the state
banks in these states are added to those of
the national banks. and it is understood
that most of this money is borrowed from
New York, 1t can be seen how potent a
factor the cotton crop movement must be
in affecting interest rates in New York.
These figures, 1 think, too, show how
vital an interest bankers, merchants and
farmers in the cotton growing states have
lI+ d Nul IeiiCy WHICH WOulu De elastic. II
any plan could be devised under which
the southern banks could issue additional
currency equal to one-fourth of their capt.
tai stock during the cotton season it would
be a god-send to that section. For it would
enable the banks there to furnish the
money needed without outside aid, and free
from the cost of interest now paid on Dor
ro"ed money, and national banks in all
other sections having the same privilege,
the result would be TO make money more
abundant and cheaper, and to relieve the
New York market of the annual strain
now put upon il.
ION Oct. s, 1896, the capital stock of the
national banks in the eight states named
was about $3S, 900, 0O0 Could they have is
sued currency to the extent of one-fourth
o. this amount, they could themselves
nave furnished about 80. 50000 of the $11, -
WiW0 they were compelled under existing
circumstances to borrow outside. In my
opinion therefore, the cotton growing
south has a more vital interest in devils
ing @ bank currency which is elastic as
wen as safe, than any other section of the
United States.'