The Bridgeport evening farmer., 1915-08-24
THIRTY MILLIONS
 READY TO HELP COTTON GROWERS
Secretary McAdoo Says He'll Aid South and Fore
 stall Slump.

$ Washington, Aug. 24.-Secretary. McAdoo yesterday announced through the treasury department rrorn his sum mer home at North Haven, Me- that he would meet lthe British Order in Council. declaring cotton absolute con- traband by depositing, if necessary, $30,OOO,000 in the reserve banks at Richmond, Atlanta and Dallas to en-. able them to assist in financing the cotton crop. MT. McAdoo is convince ed that there is no cause for alarm and that local institutions are prepar= ed to do their utmost to prevent a. disastrous dumping of cotton on a fal1- ing market He is prepared, he says, to deposit this cotton money with out interest, and he believes it could be lent to farmers at not more than 6 per cent. on cotton warehouse certih- cates.s
 The departments statement on the subject, referring to MT. McAdoo's plan to charge no interest on the govern ment deposits, says that it is Justified by the unusual situation respecting The departments statement continues as follows:
 secretary McAdoo said that one of his chief objects was to create a basis for such enlarged credit in the South that the banks will have ample re- sources to extend to producers such a.ccommo dations that they will be able to carry cotton in warehouses for a reasonable length of -t1ine until it can be marketed advantageously. Tn or- der to accomplish this, he said that the national and state banks, which are members of the Federal reserve system should make loans on ware house receipts for insured cotton at low rates of interest; that the banks can well afford to carry cotton for pro- ducers at per cent. especially if they are able to rediscount cotton paper at the Federal Reserve banks at a much lower rate than 6 per cent; that the credit resources of the banks of the country are greater than ever before in our history, and that there is no req son why the banks should not, in CO., operation with the merchants of the South, help the cotton producers with loans at low rates in the present pe- culiar situation. %<
 teThe secretary said that the Federal Reserve board had a right to deter mine the rate of interest, which the Federal Reserve banks can charge member banks on notes or loans se- cured by insured warehoused cotton redfscounted with Federal Reserve banks. He has been unable to con- suit his colleagues of the Federal Re- | serve board on account of his absencal
 
 of their cooperation in every reason able way.
 secretary McAdoo said that if it should appear, however, that the, ob- | ject in view can be accomplished with greater efficiency to the cotton pro- dueers, the merchants and the banks | of the South by depositing governm ent | funds in the national banks direct in stead of in the Federal Reserve banks i he would take that course and make l deposits in such national banks as would give him the assurance that the i money so depisited or the credit based thereon would be loaned on cotton l insured or warehoused and at a, rate of interest not to exceed per cent s'The secretary said he believed | there was no occasion for alarm about [ the future of cotton, and that if the I bankers and merchants would co-op- | crate with each other and with the cotton producers of the South in | spirit of patriotism and mutual regard | for each others welfare, the situation [ could be handled with happy results | toI all concerne ed. He expressed the | earnest hope that this would be done"
 W.P. G. Harding of the Federal Re-s serve board. chairman of the boards com mulittee on cotton, conferred with ! President Wilson at length yesterday { on the cotton situation. Particular at tention, it is understood, was paid to i the effect on the cotton business of the | United States of the recent British Or der in Council putting cotton on the i list of absolute contraband.
 MT. Harding will deliver an address before the Alabama Merchants Asso- citation at Birmingham on Wednesday, 7 where he has been Invited to discuss cotton. MT. Harding refused to com ment on his conference with the Pres ident.