Bryan daily eagle and pilot. [volume] (Bryan, Tex.) 1909-1918, 1912-09-10
LOANS ON COTTON.

The arrangement which has been
entered into between the San Antonio
National Bank and the Texas Farmers
Union, whereby cotton raisers in
Southwest Texas may borrow money
from the bank to enable them to hold
cotton for more satisfactory prices, in.
sures the farmers of this part of the
state of an independence in the mat
ter of marketing cotton which they
have never before enjoyed, and the
rate of interest which they will be
required to pay for the use of the
money is so low that the borrowing
will work no hardship.
This arrangement is in line with a
movement started several months ago
by leaders of the Texas Farmers
Union, the initiative having been
taken by Peter Radford, president of
that organization; and Colonel Breck-
enridge, speaking for the bank, of
which he has SO long been the leading
spirit, promptly agreed at the outset
to accede to the request made by Mr.
Radford for such loans and at the
rate of interest suggested by him. II
is understood that other banking es-
Establishments in Texas have also
agreed to an arrangement similar to
that made by Colonel Breckenridge
and Judge Denman for the San An
tonic National Bank, so Al may be as
sumed that Texas cotton growers will
be In more easy circumstances this
year than usual. With a loan CT $35
bale farmers should be able 10 set
tie up their current Indebtedness and
provide for such immediate contingent
cies as are likely to arise. and their
cotton, remaining in warehouses, can
be sold at any time the market may
be assumed to be such as to Justify
sales.
The farmers of Texas. especially
those of Southwest Texas, are to be
congratulated on this arrangement,
which, it is believed, will enable them
to hold cotton for better prices. San
Antonio Express.
The Eagle hopes the plan will prove
successful and be the means of the
farmers securing a higher price for
the staple. The plan. however, has
the same elements as dealing in fu-
lures, and carries precisely the same
risks. If the price advances, he wins
il 1t declines, he loses.
When farmer stores his cotton
and borrows money on it, he must pay
interest on the sum borrowed; he
must keep his cotton insured for his
and the banks protection; must pay
storage, and at the same time take
the risk of the price going down
These items of expense are consider
able, and even If the price should
make small advance, the expenses
would Offset the gain.
And just how holding cotton in
warehouses will have a tendency to
advance the price, is a question The
Eagle has never been able to under
stand. 1t is claimed that rushing cot
ton on the market in large quantities
lowers the price. What is the differ
ence if il is rushed to the warehouses
whether it is sold or not The re-
ceipts are known by the spinners and
the whole world, and 1t is the knowl
edge of the size of the crop that in
fiuences the price. If the cotton is
made the knowledge can not be kept
from the spinner, and he will pay ac-
cording to the size OF the crop. If he
knows he can get all he wants, he will
offer only low price. If he fears his
mills will lie idle for want of cotton.
he will offer high price in order to
get it, Suppose the farmers should
hold their cotton and not sell bale
for a year, what then? The spinner
would know that it was made and in
the warehouses, and that it must come
on the market sooner or later. Then
when the next crop came on the sup
ply would be doubled, the farmers
would be compelled to sell to pay their
oans, and the price would drop to one
half. It therefore occurs to us the
,nly way for the farmers to regulate
he price of cotton, is to regulate the
Iize of the crop.
However, we hope we are mistaken,
hat the holding plan will prove sue
,essful, and The Eagle stands ready
o aid in the movement in every way
,ossible.