The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1915-08-25
FUNDS TO MOVE COTTON CROP
WILLIAMS POINTS OUT THAT RE-
SERVE AND NATIONAL BANKS
HAVE MONEY TO FIN
ANCE CROP.
Comptroller of Currency Says That
Banks Should Employ Funds to
Make Loans on Staple Commodities.
When This Will Relieve Congestion
and Promote Legitimate Commerce.

rency announced today that the
present unemployed loaning capacity
of national banks and reserve banks
was sufficient to finance at market
value the entire cotton crop and half,
If not all. Of the tobacco and wheat
crops and to justify an expansion
of credit of two or three billion dol
lars.
"A statement issued by the COMP
troller referred to the prospect for
unusual demands for funds, particu-
larly II cotton should be declared
,contraband, and declared that never
before had the banks been so strong
and 80 thoroughly prepared to handle
any problem.
Just before the statement was is
sued the British embassy authorized
the announcement that the allies had
agreed on the principle that cotton
was contraband.
Special requirements which the
banks may have to meet In the ear
future were Summarized by Mr. VIII
liams as follows:
First. The yearly recurring de-
mand for funds with which to move
the crops, which this year, except as
to cotton. are unusually large and
commanding full prices.
Second. The unusual demand for
funds which may arise to enable cot
ton growers to meet any congestion
In the movement or marketing Of the
crop, in the event that cotton should
be declared contraband. ...>s.
Third. Demands which are likely
to be made on national banks, both
directly and indirectly. in connection
with the extension of credit to for
eign purchasers of supplies of all
kinds, and to pay for the American
securities which may be returned to
us bypforeign creditors II
Continuing the statement said: s.
THE actual figures show that the
present condition Of the national
banks"of this country have never be-
fore been SO strong and 80 thoroughly
prepared to grapple with and handle
successfully any problem. however
large. which may be presented to
them, as they are today These fig-
ures show that the national banks
OF this country and the IL federal
reserve banks, exclusive of State
banks and trust companies, have at
this time an unemployed loaning ca
pacity sufficient to enable them, if
need be. to carry for our own people
at market value the entire cotton
crop. and half If not the whole "6f
the wheat crop and tobacco crop,
which 1t is not of course conceivable
that they will be asked to do, and also
finance, until the purchasers can pay
us in gold or its equivalent a thou
sand million dollars or SO Of exports
OF fOodstuffs or manufactured prod
ucts to be shipped to the rest of the
world.
1T Is far better for the banks to
employ their surplus funds in max
Ing loans on staple commodities
where they can relieve congestion or
promote legitimate commercial trans
actions rather than permit these
funds to be used for the imitation of
the stock markets where speculation
in securities has already reached a
point which invites caution. ."
THE abstract of condition Of ma.
tional banks as. OF June 23, 1915, Just
tcompleted, shows that notwithstand-
Ing the great reduction in reserve re-
quirements which went into effect
with the inauguration of the federal
reserve system in November last, the
actual reserves of the national banks
on June %, 1915, are far in excess
Of the largest reserves ever held at
any one time in the past history of
the country and amounted to $1,S4O,-
100000 or $77S, 100000 more than
the amount which the national banks
|are required to hold.
This surplus reserve, it Is esti-
mated, is sufficient to justify, on a
conservative basis. an expansion OF
credit or a further loaning power of.
say $2.O0O,OOO,OOO or $4,000, ,OOO, 900:
The present total loans Of all the ma :
tional banks amount to about $6,66O,-
100000. year ago the surplus re-
serve OF the national banks was only
$il 900, 600. SO that the increase over
the surplus reserve shown q year ago
is s737, 100000. ,''
THE total reserve of the national
banks now exceeds by $4,000 600 ITO