The age-herald., 1897-09-23
ELASTIC CURRENCY THE SOUTH'S NEED Deputy Comptroller of the Currency COi-
 lin Is an Expert. DISCUSSES THE QUESTION And Clearly Demonstrates That the South
 Should Be Recognized IN NAMING THE QUALITY OF MONEY Southern Cotton Crop Calls for $500, 0,0O0,o 900 Which Now Comes Largely from the
 North-Let Southern Banks
 Issue Currency.
DISCUSSES THE QUESTION
IN NAMING THE QUALITY OF MONEY

Washington, Sept 22.-Deputy Comlp- trolrer of the Currency Coffin, in dis cussfng the recent advance in money rates in New York. said this morning; "Some of the recent sharp advances in Interest rate on demand loans Tn New York is no doubt due to speculative ma nipulation of the stock market but think the impulse to the upward turn has been given by the heavy withdrawal from New York of funds for the legiti- mate purpose of moving the cotton crop now coming to market.
 tAs a resident of South Carolina and familiar with the movement of this crop I have for years observed its effect up on national bank statements as well as on the money market in New York, during afae month of September. As rule the rates of interest advance about this time and in some years have approached the danger line, ard whihe the movement If the wheat and other great crops has contributed to this effect, still I think that the movement of the cotton crop h s been the main factor for this rise.
 "Tha average value of the cotton yield is about $500, 900, 900 and it is principally marketed between October 1 and March l. or within period of five months, but it is peculiar in this respect that only about one-nint1l of the entire crop when this is 9,0OOOOO bales, remains in the sec tion where it Is raised. Of the remain rg eight -nintns about 100000 bales bales is shipped north where it is used, and the greater portion of the crop is ex- ported from the United States. The rapid removal of SO large proportion of this great produce within so short period of time requires a large amount Of actual currency, for most of the cot ton is paid for in interior towns at the soutIh with spoih cash. AS the cotton growing region is not denseiy populated the accumulation of banking capital thsre is not sufficient to provide the enormous amount of money needed for a few months to move the crop and fer this reason the southern banks have to borrow largely from banks in other sec tions during this crop period. This is re- ffected in national bank repolts for the past few years by the following figures showing the amount of money borrowed by national banks in the distinctively ootton sitates of North Carolina, South Carolina, Georgia Louisiana. Mississippi,
 Ia4o sx, aoh year approximating October 1 and Ma ..h 1.
 "oct 5, 1887, ss,3s5 ,oOO; Feb. IA, 1sss s1,s7S,ooo; Oct. 4, 1888, $s,93s,o00; Feb. 2e 1sss s1,s31, GOO; Sept 30, 1889, $s,257,oOO; Feb. 2S, 1ssO s2, 2,1S1, 900; Oct. 2, 1890. $l4,- 5S4,ooo; February 26. 1891, s5,54s,ooo; Sept 25, 1891, $15,553, 900: March 1, 1892, ss,621,- GOO; Sept. sO 1892, s1Os49oOO; March 6, 1893, $4,725,o00; Oct. 8, 1893, $12,351,ooo Feb. 2S. 1884, $1,941, ,o00; Oct 2, 1894, $11,- Ill ,0oO; March 5, 1895, $2,761,ooo; Sept. 2S. 1895, s1o,so3, ,OOo; Feb. 2S, 1896, $4,O16,000; Oct. 6. 1886, s11 ,osS,o ,ooo; March g, 1897, $1,- 3S5, GOO.
 "When the borrowings of the state banks in these states are added to those of the national banks, and it is under stood that most of this money is bor- rowed from New York, it can be seen how potent factor the cotton crop movement must be in affecting interest rates in New York.
 These figures. think, too. show how vital an interest bankers, merchants and farmers in the cotton growing states have in a currency which would be elas- tic. if any plan could be devised under which the southern banks could issue additional currency equal to one-fourth Of the capital 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 reduce the cost of interest now paid on borrowed money and national banks in all other sections having the same privilege. hte result dant and cheaper and to relieve the New York market of the annual strain now put upon it.
 "On Oct 6, 1896, the capital stock of the national banks in the eight states named was about sss. .Ooo, 900. Could they have issued currency to the extent of fourth of the same they could them selves have furnished about ss,500.oo0 of the sl,,aas.ooa. they were Compelled. un- der existing circumstances, to borrow