The weekly tribune and the Cape County herald. (Cape Girardeau, Mo.) 1914-1918, 1915-10-22

modities Of the farmer, the staple com
modities, can now be borrowed upon
and the commercial parer based upor
these transactions : given value I'm.
der tie law.
That is what we call eligible paper
For example, if you wanted to Dor.
row upon staple, farm products, anc
the bank loans you that money, it, in
return, can go to the Federal Reserve
Bank of your district. The Federal
Reserve Bank win advance the money
on that paper to your local bank. and
your local bank is, therefore, never
confronted with a situation such as
that which presented itself in times
past, of being unable to borrow money,
if it did not have enough of its own
to lend you when you needed it.
at is not in that position any Ion
ger because it can always go to a
Federal Reserve Bank Of your district
and see that the note is converted in
to currency, in this way, because it
is eligible paper under the Federal Re-
serve Act, and therefore entitled to re-
discount.
"The Federal Board, short time
ago, in order to make this situation
even more favorable to the farmers,
adopted what is called the commodity
regulations.
"Under those regulations, we made
this distinct provision that whatever
notes secured by staple commodities
were taken or discounted by a local
bank at rate Of interest, including all
commissions, not in excess of six per
cent, that such paper would be given
rcdiscount in a Federal Reserve
Bank.
eve also provided for the Federal
Reserve Banks three per cent dis
count rate, so that the bank which
takes your commodity paper, provided
it does not charge you more than six
per cent interest, can take that paper
TO the Federal Reserve Bank of your
district, put its endorsement thereon
and re-discount it for three per cent.
This is a fair transaction and it
gives the farmers and producers the
opportunity of getting money at rea-
sonable rates. And as much as they
need for carrying their crops for a
time, until they can market
them, not in declining market, but
market them at time when the nat
Ural conditions are restored and when
hey can do so at greater advan-
tage.
''The difference between the rate
which your local bank charges you, six
per cent, and the rate which the Fed
cral Reserve Bank charges is three per
cent. The difference of three per cent
is fair profit to the local Bank upon
that transaction for any risk that it
may take in endorsing the note.
81 am trying, gentlemen, to make
clear to you the benefits Of this great
piece Of legislation, and the fact that
you are now protected against those
extreme Quotations, which are felt
most keenly by the farmers in the !
South where l used to live.
an the fall of the year when cot |
on matured, the first object of the /
merchant and banker was to force the /
sale Of the cotton in order to liquidate /
he debt Of the farmer, and the result /
ras that the lowest prices instead OF .
air or average prices we're obtained |
IN account Of the state Of the mar /
,et.
"The chief benefits, my friends, of .
he Federal Reserve Act, l have been
rying to explain to you from the sand
Joint of the farmer, because l assume
hat that is the standpoint that inter
SITS you most.
But its great results go farther
han the farmer, the great results of
,iece of legislation of this kind, are
Infused throughout the land and af-
Get every man, woman and child.
''The Republican party has been tell
ng us for years that the Democratic
,arty was incompetent to conduct the
fairs of this great nation, and that
hey did not understand anything
bout business. The Republican party,
casting as it did of all the business
bility and capacity of the Country,
ever was able to give you a piece of
egislation of this kind.
"There is another pcint to which l
ali your attention in connection with
he business capacity Of the Democra-
ic party, and that is with reference
o the condition of the country since
he war in Europe broke out in 1914.
We were confronted with a situation
Gov. E. w. Major
AdniniStra