The Donaldsonville chief. [volume] (Donaldsonville, La.) 1871-current, 1910-11-12
ADVANCE MONEY ON COTTON
Texas Commissioner of Insurance and
Banking Makes Ruling of Much
Importance to Farmers.

The commissioner of insurance ana
banking of the state of Texas recently
made ruling on advancing money for
the handling of the cotton crop, which
is Of great Importance to all classes OF
people of that state, especially the
farmers. It is as follows:
The farmers being interested along
with all other classes of citizens OF the
state, the ruling of the commissioner
of Insurance and banking who has
again notified all state banks OF the
ruling made last year relative to hand.
ling the cotton crop which is now
! coming on the market, will be OF I'M
portance to them at this time. The com.
missioner Is sending out the follow
ing:
Section SO Of the state banking
laws, digest of 1909, reads as fol-
lows:
All state banks and trust com.
panies shall be permitted to loan OF
discount commercial or business paper
secured by lien upon cotton and cotton
seed products to the same extent ana
upon the same conditions as is now or
may be provided for national banks
under the laws of the United States,
In a letter to a state banker max
| ing inquiry upon the subject, the COM
missioner of insurance and banking
ruled that, in view of this provision OF
4 the new law, which became effective
August 8, 1909, state banks and trust
companies may make advances to any
one person, firm or corporation upon
| the security of cotton and cotton seed
| products in excess of 25 per cent. OF
the capital stock of the bank or trust
company in either OF the following
ways:
Il A bank or trust company may
discount or cash drafts drawn by the
seller OF cotton or cotton seed prod.
ucts on the purchasers thereof for tbs
purchase price, such drafts having at.
tached thereto bills of lading of ware
house receipts for the commodity pur.
chased. These drafts may be carried
in this way during the time the com.
modify is being compressed, or assem-.
b1ed or stored for shipment, or until
! it is sold a second time and the or.
iginaI buyer has authority to draw an
other draft against the new purchaser.
This second draft may then be carried
by the bank or trust company in lieu
of the first draft issued until paid By
the purchaser and the transaction
closed Advances made in this way
must be by the discount Of drafts
drawn by seller against buyer.
q. A bank or trust company may
also discount notes given by the pur.
chaser Of cotton and cotton seed prod.
ucts to the seller for the purchase price
| thereof; that is, a buyer desiring to Sc.
i cure an advance in excess of the loan
limit to be used in purchasing cotton
or cotton seed products may give his
notes in payment for the commodities
to the persons from whom they are pur
chased, and such notes may be dis
counted for the sellers, when endorsed
by them and accompanied by ware
house receipts assigned to the bank OF
trust company.
This ruling is based upon letter
received from the comptroller of cur
rency constituting the national banking
law bearing on the subject, and al
the state banks and trust companies
have been notified of the ruling by cir
cular letter.