The Birmingham age-herald., 1914-08-31
Joseph o. Thompson, Back From Washington, Ex- plains Intentions of
 Government
EIGHT CENT COTTON
 WOULD MEAN LOSS
 TO STATE OF S2O,OOO,OOO
Urges Farmers Not to Dispose of Staple for Less Than 10H Cents. South Fortunate in Having Harding on the Federal
 Reserve Board

extensive farmers of Alabama, returned last night from Washington, where he aided W. G. MeAdoo, Secretary of the
 Treasury, in formulating his plan for the protection of the cotton crop
 Mr. Thompson in an interview last night explained in detail the plan agreed upon and urged the farmers to hasten in baling and placing their cotton in ware houses and obtaining money from the bankers Mir. Thompson stated that if cotton is sold for less than the cost of production--1OR cents-the subsequent loss
 of S9o,00o.0oO would be borne by every in- d1vldual Of the state. He declared that w. F. G. Harding was attracting most fav- orable attention by his knowledge of the present situation. His statement in full follows:
 Explains the Plan
 Now that reasonable provision has been made by the Secretary of the Treasury Tor carrying the cotton crop or that part
 of 1t which is not or may not be market able for many. months to come, I trust
 more optimistic feeling will take hold of
 the people of the south Representing as
 did the producers on the committee. I
 insisted on recommending much higher loan value than cents per pound on
 cotton. But after discussing the question
 at some length it was the deliberate judg-
 ment of the committee that cents was
 reasonable basis for loans, and We so
 reported to the Secretary of the Treas
 ury.
 Under this arrangement. on a valua
 Inf t+
 carries cents, the banker cents and
 the United States government cents.
 That is to say, if a farmer borrows S
 cents per pound on his cotton from the
 banker, the banker can get 75 per cent of such value in additional currency from
 the treasury applied for through the na-
 tlonal currency associations. This will
 give the banks of the south ample money 10 carry their customers through this pe- TOO or depression. They can make. as 1
 understand it, the volume of currency
 large enough to carry the entire export
 crops Tor many months. The farmer should be advised that no provision has
 been made, nor, indeed, can be made bv the government for him to handle his nhancial matters through any other chan nef than those used heretofore. viz. . his bank, his warehouse or his merchant Fin aiiy' the bank is the only avenue through which the treasury can be reached.
 Cost of Producing al
 IL IS up to the banks and an, sure it will be the policy of nine tenths of them to encourage the farm CT to hold his cotton, and it is en- cumbent on the farmer to get his cot. ton in bales and stores it in A ware house. properly insured, with all DOS sible haste; and go to his merchant warehouse or banker, whatever here tofore has been his method of deal Ing, and get the fullest cooperation to- ward holding every possible bale of cotton until price at least of cost of production can be obtained. The aver age cost of producing cotton east of the Mississippi river is 101s cents per pound as result of the high cost of farm supplied So it will be seen that if Ala bama farmers should be allowed to sell their cotton crop at cents per pound an actual loss of s12.50 per bale would be sustained; or an aggregate loss of 20,000,000 on the present crop to the state of Alabama-a loss that would have to be borne by bankers mer- chants. fertilizer factories. doctors: in fact, every interest in the state
 "The most unwise thing the farmer can do is to pile his cotton in seed in the houses or otherwise attempt to hold it other than by some method agree able to his creditors. Such method would produce distrust and final dis aster to the man pursuing such un- business-like methods. Regardless of the great help provided by the govern ment, the situation resolves itself in the last analysis to the individual farmer the individual merchants, the individual warehouse men. and the indi- vidual banker.
 Smith Boosts Harding
 1T would like to say here that Ala bama and the south are extremely for tunate in having Hon. w. P. G. Hard ing on the federal reserve board. Sem ton the other day that no man in public life had won so quickly a position on his merit more fully than had MT Harding, and that he had attracted attention to himself from all sections of the country; and as Holland. the we'll known financial editor. said a few days ago: MT. Harding Is most favor ably known to the leading financial au- tksrities in New York and as a mem- Der of the federal reserve board he will be in position to give good counsel when questions come before the board l which relate to banking facilities of the south Holland goes on to say that Mir. Harding's view Is that the banks l which are abuntantly protected by the cotton itself should not undertake uv force a market with intent thereby to secure payment for their loans. They | shoSld, instead, deal out so to speak. l cotton as it is needed from time to time, | aving in view the maintenance of req sonable price for 1t. They can in that \ way gradually liquidate their loans. I
 "The Secretary of the Treasury hast shown himself true friend of the1 south in his quick response to lastl years necessities. as well as giving quick relief in this years precarious situation. So, all together. we of the cotton states have much to be thank full for in the present unhappy situa this dark day of the worlds history"