The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-08-24
$3Q,O0O,OOOOF
FEDERAL MONEY
TO COTTON MEN
Treasury Will Deposit Fund
i'm Reserve Banks to
Finance Crop.
No INTEREST WILL
BE CHARGED ON 1T

WAsHiNGToN. Aug. 23.-The first step
on the part of the Federal Government
70 relieve the Southern cotton planters
was taken to-day
Announcement was made at the Treas
ury Department that Secretary McAdoo
will deposit $40. .0OO. 900 in gold In the
Federal reserve banks of Atlanta, Dali
las and Richmond. IL 20 large a sum is
needed. to facilitate the financing OF the
cotton crop. This step was decided upon
as result Of the action of the Allies
IN putting cotton on the contraband list.
&c deposits. according to the official
announcement, will he FOR the purpose
Of enabling those Federal reserve banks
to rediscount loans made on cotton Sc
cured by warehouse receipts by national
banks and those State banks that are
members OF the Federal reserve system"
No interest will be charged on these
deposits II is intended that the de-
posts shall make 1t possible for the
member banks to charge low rates on
loans ON warehoused cotton, and indi-
cations are that the Federal Reserve
Board will fix extremely low rates on
rsdscounted paper OF this character.
VIII Bolster the Price.
No disclosures have been made as to
what other steps are under contempla-
ton for the relief OF the cotton situa-
ton The idea OF Government officials
10 that loans at low rates Of interest
will enable cotton planters to hold bacl,
from the market a part Of their crops,
thus helping the price.
The President conferred to-day with
W =. u. Harding Of the Federal Re-
serve Board, who has had supervision
of all problems arising out of the cot
ton situation. Many phases of the sit
u-tion were gone into and steps which
seem to he advisable were discussed. No
announcement was made. however. az
70 what plans the President and Mr..
Harding have under consideration. Mr..
Harding will deliver speech on the
cotton situation at Birmingham Thurs
day night
Here Is the Treasury Department
statement:
The Secretary said that. in the en-
Law, The Government will for the time
being charge no interest to those de-
pUsis in Federal reserve banks. that
such action is justified py the unusual
h.s
the European war: that he considers 1t
h.s duty to use every available means
IN his power TO help the cotton pro-
duyeg Of the South in the circumstances
tndt II is matter economic i'm
pOr,ance to the entire nation that those
who have produced the cotton crop shall
have a fair opportunity to dispose OF II
gradually and in an orderly manner so
that they may not be forced. through
Inability to market their cotton gradu-
ally. to sell 1t at sacrifice prices.
For EnInrged Credit.
Secretary McAdoo said that one OF
MS chief objects was to create a basis
fog such enlarged credit In the South
that the banks will have ample re-
sources TO extend TO producers such ac-
'ommodations that they will be able to
carry cotton in warehouses for a reas-
enable length OF time until II can be
marketed advantageously.
In order to accomplish this he said
that the national and State banks which
are members OF the Federal reserve sys-
TEN should make loans on warehouse re-
'e.pts for insured cotton at low rates
~ interest: that the banks can well af-
ao,d to carry cotton for producers az
per cent. especially II they are ao.e
TO red!scount cotton paper at the Federal
reserve banks at a much lower rate than
per cent that the credit resources OF
the banks of the country are greater
'han ever before in our history and
mat there is no reason why the banks
tnoul not, in cooperation with the mer-
chants Of the South, help the cotton
Producers with loans at low rates In the
present peculiar situation.
The Secretary said that the Federal
l'eServe Board had right to determine
Inc rate of interest which the Federal
reserve banks can charge member banks
on notes or loans secured by insured and
Mdresoused cotton rediscounted with
Federal reserve banks. He has been
unable to consult his colleagues of the
Fed'Ial Reserve Board on account of
Ms absence from Washington, but feels
confident of their cooperation in every
reasonable way,
tn alternative Course.
secretary McAdoo said that II II
should appear, however. that the object
j. view can be accomplished with greater