The farmer and mechanic., 1915-09-28

the Act shall be construed as prohib-
iting notes. drafts, and bills of ex-
change secured by staple agricultural
products or other goods, wares or
merchandise, from being eligible for
rediscount, but the rediscount Of notes,
drafts or bills covering merely in
vestments or issued or drawn for the
purpose of carrying on trade in stocks,
bonds or other investment securities
is forbidden, except bonds or notes of
the Government Of the United States.
While the notes and bills admitted to
discount under the terms Of Section
8 must have q maturity at the time
Of discount of not more than ninety
days, it is provided that notes, drafts
and bills drawn Or issued for agrlcul-
tural purposes or based on live stock,
and having a maturing not exceeding
six months, may be discounted in an
amount to be limited to such percent
age of the capital Of the Federal Re-
serve Bank, as may be fixed by the
Federal Reserve Board, and the Board
has permitted the Federal Reserve
Banks in agricultural sections to re-
discount paper Of this kind to the
extent of their capital stock, which
appears to be the limit permitted un-
der the Act.
Right Marketing Vital.
The three great agricultural staples
are corn, cotton and wheat. In some
States tobacco is also an important
product. The producers of these COM
moditieS are vitality concerned in their
orderly and effective marketing. Here
tOfOre we have been accustomed to
have a stringent money market with
high interest rates in the Fall of the
year when these crops are coming
to market, and the actual producer
has frequently been obliged to sub
| init to forced sales at prices below
| the average, in order to satisfy his
| creditors. Under the Federal Reserve
| system there are now twelve indie
pendent money centers. The interest
rates have not only been stabilized
| but they are approximately the same
at all of these money centers The
banks in agricultural sections, partic-
| ularIy those in the South, are usually
| compelled to rediscount heavily at this
season of the year, in order to assist
in the movement of crops. Hereto
fore, owing to rates Of interest tha
the banks have had to pay on redis-
| counts, as we'll as to the limitations
upon the supply Of funds availa blt
for such purposes, banks have beer
| unable to any extent to assist farmer.
| in the orderly marketing of thei1
products, SO that producers having
need for funds have been in the habi
Of selling their cotton, wheat or to
baccO when ready for market, re
igardless of price. The result has beer
that the weight Of these product
upon the market has been such as t.
depress the price at the very TIM
when the most needy producers Wer
obliged to sell, SO that without ref
erence to the real demand and actua
supply, the market has been such
One-sided affair that sellers had bu
little influence in fixing prices.
Committee to Study Situation.
1t was evident two months ago tha
unless something was done to stimu
late the holders and producers of cot
ton, the market this Fall would be al
together in favor Of the buyers, re
gardless Of the plethora of none
held by the banks and the unuSuall
J low interest rates at which none
could be obtained, and in spite of re
ports from cotton producing section
throughout the world which indicate
, that the available supply Of cotto
! during the next twelve months wOul
not be crt Of proportion to the world
e requirements. The Federal ReServ
8 Board therefore appointed a commi,
r tee to study the cotton situation an
8 to report upon warehouSing faciHtie
throughout the Southern States
having been ascertained that th
: warehouse capacity was ample to pre-
: vide for all cotton upon which loar
: were likely to be required the board
e next concern was to find some NEAR
n OF providing producers with necessal
funds at reasonable interest rates
BY reason Of the very large nun