The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1914-11-17
recommended
tW. r. Camp, Chief Of North Carolina
Division OF Markets.)

Reports from l60 banks In forty
nine cotton producing counties show
how thoroughly the farmers are hold
ing their cotton for better prices. 135
banks state that the farmers of their
sections are holding for ten cents a
pound. Eleven banks report that
their farmers are holding for better
prices "a now prevail. Only two
banks specify that their farmers are
not holding for ten cents a pound.
Reports from 81 banks indicate that
the farmers of these sections are not
applying extensively for bank loans
on cotton Banks in ffty-four COM
munities report "a their farmers are
making extensive applications. Eight
banks state that some farmers are ap-
plying and five specify hat the far
mers would borrow if the funds were
available.
One hundred and nineteen banks
state that "the present conditions and
the present National legislation Is not
such that banks can lend farmers suf-
ficient funds to nab them to hold
the crop" Still 1t is evident from
these same reports that the farmers.
their cotton. The question Is, how
are they doing it? Many banks state
that they are having all they can do
20 carry old loans. No new loans can
be granted as borrowers are not pay
ing their debts. The farmers are not
paying the supply merchants and the
supply merchants are not paying the
banks. 1t is the supply merchant in
the first instance who is carrying the
farmer. The Jobbers, the fertilizer
companies, the manufacturers, and
finally the local and out of State banks
are carrying the supply merchants.
1t is evident If the farmers do not
all fhaiv n0ffnn this cucfon1 IF or0dit
will have to continue. To cash in
would force many merchants in the
South to the wall. Gradual liquidation
Of accounts will permit the payment
of a larger portion Of each obligation.
To force Immediately liquidation
would force the price OF cotton down
n proportionately decrease the debt
paying power OF farmer and merchant
alike.
The pinch in the present emergency
is that the small merchant has to live
and may have already consumed all
profits on the expectation that he will
realize these profits through farmers
and tenants paying their accounts in
full at the usual time for marketing
cotton. The large supply merchants
may usually be able to pull through il
he is given time enough for cotton tC
be sold to the best advantage. The
more common type of merchant, the
viz win AhANh 1RAtCi iAAAy
ly have to close shop unless the de.
mand for cotton quickly impr owes.
What policies do the banks Of thes.
cotton producing countries recommend
to relieve the present situation? Ma
turaly they feel the same pressur,
for liquidation of outstanding obliga
tons as the supply merchants. 1t
against all banking pronciples for
bank to lend money for a purpose tina
will tie up its funds. For the far
merS to hold their cotton means tina
the banks are forced to renew all oh
legations indefinitely unless the gov
makes some provision TO
lending money directly to the farmers
With the inability of Southern bank
ers to secur government funds a.
their funds are tied up until there
q sale of cotton. Next in number t
those bankers who advocate a reduc
ton of the acreage to be planted t
cotton comes those who
that a part Of the CROP be SOLD to NEE
outstanding obligations. Some bank
ers think that the farmers ought t
show their willingness to share in tn
present misfortune. On the other han
another banker does not believe thu
debt can properly be paid until tt
market becomes more settled.
Many bankers think that help wi
come from the Wade plan, Which pr
poses hat s135,00e 900 be loaned
FARMER and others on cotton at S
cents for one year with privilege of n
1ewal. The fact that 500, 600, 900
This sum is being raised among No
thern and Western capitalists shov
that the problem of cotton is not Sc
tional. n purchasing power Of II
South is decreased for the time beil
by the amount Of capital tied up
cotton. Every Northern and Weste,
3obber and manufacturer who SCI
the South must feel the effect Of Il
slump IN cotton. But if the farm
can borrow upon his cotton he can b
come a purchaser after has satisf
his creditors. Cotton is such an il
portant item in international ira
that the present check to it's expo
is a serious limitation on the Unit
States in maintaining Its balance
trade. Some banker urge the INN
date opening Of the Federal Reser
RanEs This will be q craat holm