The Jeffersonian. [volume] (Atlanta, Ga.) 1907-1917, 1914-08-27
A Plan For Conserving the 1914

bonds i'll the open market to be in
position to finance the holding of the
States now perishable agricultural
crops, until a return of normal finan-
cial conditions.
The State Treasurer and bank ex-
aminer to be empowered to loan to
the State banks this State bond Sc
cured currency on cotton, naval
stores or other warehoused ag-
ricultural products to an extent of
not more than 80 per cent of the
banks approved collateral repre-
sented only by warehouse receipts
of graded, valued, insured and APP
proved agricultural products. The
State bank examiner and State Treas
urer to provide that the bank itself
shall not loan over eighty per cent
of the average value of the stored
produce calculated for a period Of
three years proceeding.
The bank may loan 80 per cent of
value of the warehoused produce and
the State Treasurer 80 per cent of
the banks loan, thus keeping the
actual advance by the State down to
ga per cent of the average value of
its collateral, besides the borrowing
banks endorsement and guarantee
This extension of State aid to insure
the holding of nOn-perishable agri-
cultural produce for the recurrence
Of normal demand therefor, should
be extended through those State
banks which charge only one per
cent more to the producer for their
endorsement, making, guaranteeing
and collecting the loan, than they
pay to the State for the credit bills
In other words, the State bank
may loan on one bale of cotton $35,
or on 100 bales $500, at IL per
cent, and can borrow of the State at
IL per cent. With it's equipment
complete a State bank could recoup
expenses at one per cent commission,
which l believe cheaper and safer
than the State could effect direct
loans to planters. A State bank over
charging in interest may be penalized
10 per cent of it's loan, half payable
to the State, half to the complain
ant.
To minimize the additional work
and expense put upon the State
Treasurer S office, no bank should be
granted a loan Of less than $4,000,
which may include any number of
initial loans made by the borrowing
bank.
The State Treasurer to allow eX-
change of collateral, which however
must never fall below a margin or
excess of sc per cent above the banks
Indebtedness, thereby amply protect
ing the State against financial loss.
The bonds remaining in the State
Treasurer's office while printed to
draw 4 IL per cent will, if unsold,
actually cost the State no interest.
If they were printed in small de-
nominations for issue direct on pro-
duce they would not only cost in
terest, but might be boarded for
profit, thereby creating a scarcity Of
circulating medium which they are
issued to prevent.
The converting of the legislature
for the purpose I have outlined
would in itself have a benefcient
effect in steadying the price of our
great crop at once on the cotton eX-
changes of New York and New Or
leans, and even in Europe. The cot
ton manufacturers would immedi-
ately have warrant for supplying
their needs early in the season. With
the threat of cotton being left
friendless, no conservative manufac-
turer will ever lay in a supply for
future use.
The psychological effect of such
action, would minimize the actual
need of the credit currency to steady
IF clio nj io Ivy