Dresden enterprise and Sharon tribune. (Dresden, Tenn.) 1907-1997, 1915-08-27
McADOO WILL AID IN
HANDLING COTTON.

Washington, Aug. 23.-Treas'
ury officials tonight made public
announcement by Secretary Nc
Adoo that, in view Of the allies in
putting cotton on the contraband
list, he would, if it became neces-
sary, deposit $3O,O0O,OOO or more
in gold in the Federal Reserve
banks an Atlanta, Dallas and
Richmond for the purpose Of en-
aiding the reserve banks to re-
discount loans on cotton secured
by warehouse receipts made by
national banks and state banks
belonging to the federal reserve
system.
The gold would be deposited
temporarily, at least, without interest
charge. 1t was explained that if
it appeared that the object could
be accomplished with greater.
efficiency thereby, the deposits
would be made directly with
national banks agreeing to lend
the money on cotton at rate not
to exceed six per cent.
Secretary McAdoo authorized
the announcement from his sum-
mer home at North Haven, Me.
1t came at the close of a day OF
speculation in official circles as
to the nature OF steps which the
entente powers have indicated
they will take to uphold the cotton
market in the face of their contra
band order.
In the exercise Of the discretion
given to him by law" read the
treasury statement, Secretary
McAdoo said that the government
will, for the time being charge no
interest on these deposits in
lFederal Reserve banks; that such
action is justified by the unusual
situation respecting cotton caused
by the European war; that he
considers it his duty to use every
available means in his power to
help the cotton producer Of the
South in the circumstances; that
it is a matter of economic impor-
lance to the entire nation that
those who have produced the cot
ton crop shall have a fair oppor-
tunity to dispose Of it gradually
and in an orderly manner so they
may not be forced, through ina
bility to market their cotton grad
ually, to sell it at sacrifice prices.
THE secretary said that one of
his chief objects was to create a
basis for such enlarged credit in
the South that the banks will
have ample resources to extend
to producers such accommoda-
tions that they will be able to car
nv cotton In warehouses for a rea-
sonable length Of time until it can
be marketed advantageously. In
order to accomplish this, he said,
the national and state banks which
are members OF the federal reserve
system, should make loans on
warehouse receipts for insured
cotton at low rates Of interest; that
the banks can we'll afford to carry
cotton for producers at six per
cent, especially if they are able to
re-discount cotton paper at the
federal reserve banks at much
lower rate than six per cent; that
the credit resources of the banks of
the country are greater than ever
before ii our history, and that
there Is no reason why the banks
should not, in cooperation with
the merchants of the South, help
the cotton producers with loans at
low rates in the present peculiar
tuation,
THE federal reserve board, the
cFatary said, bad right to de-
nine the rate Of interest which
federal reserve banks can
barge member banks on notes or
loans secured by insured and
Narehoused cotton re-discounted I
With federal reserve banks. He has |