The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1914-12-22

nof De regarded as contraDanu, acllNlty
in the cotton market began. For this
reason it was essential that funds be
procured. whether the cotton fund pool
was made good or not so the movement
of the crops to the customary markets
across the sea was made possible.
theoretically, the facilities offered by
the federal reserve system which went
into operation about the time of the
beginning of the heavy movement in cot
ton, should have been sufficient TO enable
the banks of the cotton growing states
TO finance this movement. Apparently
these banks found it more convenient
or easier to obtain the needed funds in
New York than in the federal reserve
banks of Atlanta and Dallas, which. 1t
was presumed, would be especially serv-
iceable in facilitating the financing of
the movement of the cotton harvest.
One of the reasons given in the finan
cial district for this disposition is the
belief that not yet throughout the cot
ton growing states has the federal re-
serve system got fully into operation.
The presumption is that many of the
banks of the south have discounted COM
mercial paper which is excellent. but
which may not be available for redis-
counts in the reserve banks of Atlanta
or Dallas, or. In fact, any other reserve
banks. This, however, is regarded as
only a temporary condition. 1t will be
llEHtGu Wnen tnc IcutTdl AtStiNC - .
tenn is more fully in operation In other
parts of the country, as it Is in New
York or in Minneapolis or st. Louis or
any of the large financial centers.
Another Reason
Sometime ago, complaint was voiced
by some bankers in other parts of the
country that the banks of New York
we're disposed to be rigid even stingy,
in utilizing any part of their resources
to aid the cotton growing region. What
ever truth there may have been in these
complaints they certainly. If made now
do not contain truth. The banks of the
cotton growing states have had no diff
ficulty in securing financial assistance
from the banks of New York city. The
estimate disagrees as to the aggregate
amount thus far obtained. Some put
the figure as high as 100000. 000 and none
fixes the sum less than S75, o00. 900. It
has sometimes been said by those who
are familiar with this situation that the
experience already shows that New York
will remain the great money center of
the United States and that no legislation.
excepting that which embodied chaos.
can prevent it. This, however is a SUI
perficial view. The present cotton situa-
ton is explained by an extraordinary
emergency-the difficulty now of obtain
ing a sufficient number of vessels to
transport the cotton across the sea.
The gratifying and even extraordinary
announcement just made that already
the action of the federal reserve board
at Washington has resulted in perfecting
discount rates which are substantially
similar all over the country makes it
certain that there will be speedy gen
eral local mobilization and use of credit.
This will be to the advantage of the
banks of the cotton growing regions,
and should make 1t possible for these
hanks next year to handle the situation
without any strain.
Probably Max May, now esteemed one
of the three or four great experts in the
making and handling of foreign exchange,
would be able. If he were free to do so. TO
state approximately how much money has
been borrowed from New York banks by
southern banks. and he certainly would be
free to confess that no responsible appi-
cation for loans had been turned down
by the banks of New York city His own
institution must have been greatly occu-
pied with this kind of financing. Two
years ago, under his supervision, the in
stitution financed with foreign exchange
probably two-thirds, perhaps a little