The Washington herald., 1907-10-26

Representative BUrleson, of Texas, yes
aerday called on Acting Secretary of the
Treasury Edwards and asked that de-
posts 10 the amount of SlO,0O0OOO one
third Of the amount deposited in New
York to check the Wall street panic, be
distributed among the Southern banks IN
order TO prevent sacrifices Of cotton
He was told that however much the de-
-PaTtment might be disposed to do this it
would not now be possible, as the deposits
already made left the Treasury with
barely working cash balance.
Mr.. Burleson was led to make his ap-
plication at the department by the state
ment made in press dispatches from
Houston, Tex, that bankers have served
notice on owners of cotton in warehouses
tthat they viii no longer make advances
on cotton 10 be held in storage, the ex-
PLANTATION of this being that the bankers
feel that by forcing the sale Of cotton in
storage they Will bring millions of much
aneeded foreign money to this country.
Mr.. Burleson takes the position that
There is as much reason to avoid sacrifice
sales Of cotton as there is to avoid sacri-
ice sales Of stocks.
He sees in this withdrawal of bank ac-
commodations to warehouse cotton
proposition TO sacrifice the farmer pro-
ducer Of cotton by making him sell under
price. In order to assist the holders OF
stocks in Wall street TO protect them
selves against the necessity Of throwing
their stocks on the market at a sacrifice.
lie called the attention of Secretary Ed
wards to the provision Of the recent law
that the Secretary Of the Treasury. shall
distribute the deposits herein provided
for, s far as practicable. equally between
She different States and sections" and
also 10 the policy Of the Treasury 10 in
terpret the provision for security by
United States bonds or otherwise" so AS /
70 permit the acceptance Of other than |
United States bonds as security for de- /
posts.
His proposition was that the Treasury /
should distribute 100000 of deposits /
among the Southern banks, accepting
from the banks as security warehouse re-
Ceipts for cotton at . per cent OF the |
market value
He represented to the Secretary that
these warehouse certificates would be I
much better security than any municipal |
bonds now accepted to secure deposits /
IN that they represented an actual value |
-four times greater than the amount to be |
% q
of Sleg@.o0 in Southern banks, at this |
time, the cotton growers might be saved
from making a sacrifice to foreign pur- |
chasers Of practically $3.50, 100000
4 Question of Policy.
Secretary Edwards replied that in the
matter Of accepting from the banks ware |
house certificates for cotton as security. |
there was involved a question of policy I
which he could not pass upon and which /
would have to be presented 10 Secretary /
Cortelyou, but that Independently Of that
the deposits could not be made at this |
time because the department was reduced /
10 an actual working cash balance by /
deposits already made
Speaking of his interview with Secre- /
tary Edwards, Mr.. Burleson said.
1T has been the policy of the Treasury i
Department TO so interpret the phrase Of
the law Of the United States bonds or .
otherwise as TO admit Of security other
than United States bonds being accepted. /
Secretary Edwards tells me that thus
far this has been extended only 10 ac- |
Ceptable municipal bonds. but if this in /
depreciation Of the law is permissible. |
there can be no valid reason for refusing
to accept from the banks warehouse Ger
fihcates for cotton
There is surely as good reason to pro |
tect the producers from being forced to 1
sacrifice their cotton because of tightness
Of money in the bank as there is TO /
come 10 the relief of the stock gamblers 1
on Wall street to save them from the 4
necessity Of selling their stocks at a sac /
rihce because Of a tight money market
These warehouse certificates held bv
the banks represent an actual. not a 4
speculative value. If the cotton pro- /
ducer is forced TO sell his cotton because /
the banks will no longer advance him |
money, and for the purpose or bringing |
foreign money into this country for the /
relief Of the stock market. it will mean
that the crop will be sold for about
$l60,O000o0 below what it should bring and /.
that the advantage OF this forced sale 1
viii accrue to the foreign purchaser. and !
that much money which should come TO /
this country going into the pockets Of our /
farmers. will be held abroad
a forced sale of the cotton croD At
whatever sacrifice Of price would. Of
course bring a large volume Of money to
this country, but it is poor economies TO
force the sale Of a commodity Of actual
value by the producer in order to increase
the volume of money Immediately avail
able to sustain the value of the stocks.
4 Reasonable Proposition.
The proposition that deposits should
be made in the Southern banks to reliev,.
the tightness Of the money market in
that section is in compliance with the
provision of law that deposits shall be
as far as practicable distributed euuitabIv
between the different States and sections.
The acceptance Of warehouse receipts for
cotton as security for deposits would be
as safe as the acceptance of any form of
bonds that might be offered The sug-
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