The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1914-11-08
LOAN FUND PLAN
NO VIOLATION OF
ANTITRUST LAWS
Attorney General Renders
Opinion at Request of
President.
SUCCESS OF s135,000,O00
POOL BELIEVED ASSURED
More Than $so,ooo,ooo of North's
Share of $1o0, 100000 AL
ready Subscribed.
REMAINDER ABOUT PROMISED
Treasury Department Makes Public
Correspondence Relating
to Matter.

WAsTIINGTON. November mo vio-
lstion of Federal antitrust laws is
threatened by the cotton loan fund
plan recently perfected by bankers and
members OF the Federal Reserve Board.
according TO opinion handed down
late to-day by Attorney General Greg
ory at the request OF President Wilson.
Success of the sl35, 100000 pool now
is believed by Treasury officials TO be
assured. More than SS0.000.000 OF the
Sl00.O00.0oO TO he raised among North
crn bankers already has been sub
acrlbed. and practically all OF the re-
nainder. II is understood. had been
promised on condition OF favorable
opinion from the Attorney General.
New England hnancicrs. It was said.
we're reluctant 10 enter the plan until
definitely assured that the method OF
raising the fund would not be con-
strued as unlawful.
TREASURY DEPARTMENT
GIVES OUT CORRESPONDENCE
Attorney General Gregorys opinion
was rendered after conference with
President Wilson. The Treasury De-
partmcnt tonight made public the fol-
lowing correspondence:
The White House.
November :. 1914.
My Dear MIR. Attorney y-Gcneral
II am sending the inclosed paper.
submitted to me b. the Secretary. OF
the Treasury. In order 20 ascertain
whether. In your opinion. the proposed
cotton loan fund may be lawfully
formed. know that 1t Is contrary TO
the practice OF the department TO give
opinions beforehand as to conte1n plated
transactions, and think that such
opinions ought never In ordinary cir
rumsfances to be given, but the CIR
cumstances with regard to the han
ding OF the great cotton crop, which
have .been created by the European
s%atssaTe.5aost-Sxtrao and seem,
to- Justify extraordinary action. 1T is
for that reason that | venture to ask
YOU TO depart in this case from the
usual practice of your department
II occurs to me that the fund con-.
t.inplated stands in a class by Itself
II is hardly conceivable that such ar
Iangements could become settled prac-
tees or furnish prcccdents which would
10. followed in the regular course Of
hrsincss or under ordinary conditions
The. as exceptional in their ma
'urc the circumstances they are
meant to deal with. and can hardly be
looked upon as, by possibility even.
dangerous precedents. 1t is for this
reason that l feel the more justified In
asking for your opinion in the prem
ises.
Cordially and sincerely yours.
tSignedD "wOODROW WILSON"
NT'TORNEY GENERAL
REPLIES TO PRESIDENT
November I. 1914.
'peur Mr.. President:
Il have the honor To reply 10 your
request for my opinion as to whether
the Federal antitrust laws uhe So
allcd Sherman act, the so-called Clay
ton oct. and the trade commiss act
would be violated In any respect by the
carrying out OF a plan which has been
devised for raising and administering
a fund OF Sl35 100000 TO he lent on the
security of cotton. y copy of the plan
is attached hereto
Countries which take annually
about 100000 bales Of American cot
ton--morc than half the crop-arc
now engaged in war. Trade between
the United states and those countries
in some cases virtually has come to a
complete stop, and in others has been
seriously hindered. Foreign exchange
has been badly demoralizcd. In con
sequence of these extraordinary condi-
tions, II has been impossible to obtain
In the usual ways the large amount
OF cash required to liquidate the in
debtedncsS incurred In the course OF
raising and marketing the cotton crop.
ITO meet this situation. the plan In
question has been proposed. II con-
templates the making up by synd-
cate. composed principally of banks
and bankers. or a fund OF $4,000, 600
to be lent on tho security Of cotton to
borrowers In the cotton growing States
under the direction Of a central com
! mittee, composed of the individual
members OF the Federal Reserve Board
and various auxiliary committees.
Nothing in the nature of price
liking, restriction of production. divi-
sion Of territory or control of markets
liz involved. Loans Will be made as
n IN
ducers The members OF tho syndi-
cate will be perfectly free to make
other loans in any amount, 10 any per-
sons. and on any lawful terms. Bor-
rowera VIII he under no restraint what
ever as to the price or the time at
which they NAL sell tseir cotton. Nor
VIII their free agency in borrowing, or
N not borrowing, as they see fit, and
from whom they sew ht in any man
ncr be restricted. In short. the plan
/ simply provides the cash, which Is i'm
pcrat'vcly requested to li1uidatc the
ndchtc tcdncss Incurred in the course OF
/ raising and marketing the cotton CROP
4 but which cannot now be obtained from
/ tho usual sources OF supply because
5of the extraordinary conditions pre-
{ svailing in the money markets and i'm
4 tho trade of tho world.
Il "rhc amount OF this fund is barely
!Smorc than ] per cent of the total out
Estanding loans and discounts of bank
Hing institutions In the United Statos
(sand is much less than the amount Of
leash usually employed In marketing
Isthe cotton crop. Nor would even this
kfsnal1 part of the banking capital Of
fthc United States become impoundetb
fas result OF the plan, but; upon being
{lcnt, would return at once into gen-
3iorai circulation.
I ri am unable to see how such plan
IGouId be thought to fall within the
iIpurvlcw Of the antitrust laws.
Sincerely yours.
"(tSigncd) IT. w. GREGORY,
Attorney General"