The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1915-08-25
AID / FOR { RI COTTON GROWERS.
M'ADOO ANNOUNCES PLAN TO
MEET ANY NEEDS or SOUTH
BY GOLD DEPOSITS.
TO Insure Supply of Money for Crop
Secretary Says. Funds May he De-
posted Directly in National Banks
Instead of in Federal Reserve, as
Now Proposed.

nOunccincnt by Secretary MCAdOO that
in view of the action of the allies in
putting cotton on the contraband list,
he would. If necessary. deposit $780,
100000 in gold in federal reserve
banks in Atlanta, Dallas and Rich
mond for the purpose Of enabling the
reserve banks to rediscount loans on
cotton secured by warehouse receipts
made by national and State banks be-
longing to the federal reserve system.
The gold would be deposited tenn
porarily, at least, without interest
charge. 1t was explained that if it
appeared the object could be accom-
plished with greater efficiency there
by, the deposits would be made d-
rectly with national banks agreeing to
lend the money on cotton at a rate
not to exceed 6 per cent.
SecrcHry McAdoO authorized the
announcement from his summer
home at North Haven, Maine. 1t
came at the close of a day of specu-
lation in official circles as to the ma
ture Ofstepswhichthe tao2th2 h nm
ture of steps which the entente powers
have indicated they will take to up
hold the cotton market in the face OF
| their contra band order.
I'm the exercise of the discretion
given TO him by law" read the rreas-
ury statement, Secretary McAdoo said
that the government. for the time be-
ing. charge no interest on these de-
posits in federal reserve banks, that
such action isustified ES9O$jH afRRR
such action is justified by the unusual
situation respecting cotton caused by
the European war; that he considers
1t his duty to use every available
means in his power to help the cotton
producer of the South in the circum-
stances; that it is a matter for eco
nomic importance to. the entire ma
ton that those who have produced
the cotton crop shall have q fair Op-
portunity to dispose of it gradually
and in an orderly manner SO they may
not be forced through inability to
market their cotton gradually to sell
it at sacrific prices.
The secretary said that his chief
object was to create basis for such
an enlarged credit in the South that
the banks will have ample resources
to extend to producers such accom-
modations that they will be able to
carry cotton in warehouses for a rea-
sonablc length of time until it can be
marketed advantageously.
In order to accomplish this, he
said thatt he national and State
banks which are members of the fed
eral reserve system should make loans
on warehouse receipts for insured
the banks can well afford to carry
cotton at low rates of interest; that
cotton for producers at per cent,
especially If they are able to redis-
count cotton paper at the federal re-
server banks at a much lover rate
than per cent; that the credit re-
sources of the banks of the country
are greater than ever before in our
history and that there Is no reason
why banks should not, in cooperation
with the merchants of the South,
help the cotton producers with loans
at low rates in the present peculiar
situation.
THE federal reserve board. the
secretary said, had right 10 deter
mine the rate of interest which the
federal reserve banks can charge
member banks on notes or loans Sc
cured by insured and warehoused cot :
ton rcdiscOunted with federal reserve
banks. s.1chasbeen shradoiumicl
banks. He has been unable to consult
his colleagues of the federal reserve
board on account of his absence from
| Washington, but feels confident of
their cooperation in every reasona bic
way.
Mr.. McAdoo said, however that
should it appear that the object in
view could he accomplished with
greater efficiency to the cotton pro-
duccrs the merchants and the banks
OF the South by dcpositing govern
incnt funds i'm the national banks di-
rect instead of i'm the federal re-
serve banks, he would take that course
and make deposits i'm such national
banks az would give him the assur-
ancc that the money so deposited or
loaned on cotton insured or ware
"A "A r:It a. nf inf