Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1915-08-24
McADOO WILL HELP
Treasury Department Promises 6 Pei
Cent Money to Cotton Planters.

Secretary McAdoo announced last
night that in view of the action Of the
Allies in putting cotton on the con-
traband list, he would if it became
necessary, deposit $4,000, 600 or more
in gold IN the Federal reserve banks
at atlanta, Dallas and Richmond for
the purpose Of enabling the reserve
: banks to re-discount loans on cotton
secured by warehouse receipts made
by national banks and state banks be-
longing to the Federal reserve system.
The gold would be deposited tempo
rarily, at least, without interest
charge. 1t was explained that it ap-
peared that the object could be ac-
compiished with greater efficiency
thereby, the deposits would be made
directly with national banks agreeing
to lend the money on cotton at a rate
not to exceed 6 per cent.
The announcement 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 would take to uphold the cotton
markets in the face Of their contra
band order.
In the exercise of the discretion
given to him by law" read a treasury
statement, Secretary McAdoo said
that the government will for the time
being charge no interest on these de-
posts in Federal reserve banks; tina:
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 circum-
stances; hat it is a matter of econom-
ic import to the entire nation that
those who have produced the cotton
shall have a fair opportunity to dis
pose of it gradually n in an orderly
n so they may not be forced,
through inability to market their cot
ton gradually, to sell it at sacrifice
prices.
1.-The secretary said that n Of his
chief objects vas to create a basis Tor
such enlarged credit in the south that
the banks will have ample
to extend to producers such accommo-
dations that they will be able to carry
cotton in warehouses for a reasonable
length Of time until 1t can be market
ed adyantageously. In order to ac-
complish this, he said that the nation
al and state banks which are members
Of the Federal reserve system should
make loans on warehouse receipts Tor
insured cotton at low rates Of interest;
that the banks can we'll afford to carry
cotton for producers at 6 per cent, es-
pecially If they are able to re-discount
cotton paper at the Federal reserve
banks at a much lower rate than . per
cent; that the credit or the
banks Of the country are greater than
ever before in our history and that
there is no reason why the banks
should not, in cooperation with the
merchants of the south, help the cot
ton producers with loans at low rates
in the present situation.
THE Federal reserve board, the
secretary said, had a right to deter
mine the rate Of interest which the
Federal reserve banks a charge
member banks on notes or loans Sc
cured by insured and warehoused cot
ton ~rediscounted with Federal reserve
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 reasonable
way. -.
"Mr. McAdco said, however, that
should it appear that the object In
view could be accomplished with
greater efficiency to the cotton pro-
ducers, the merchants and the banks
of the south by depositing government
funds in the national banks direct In
stead Oh the reueIdi iSociSO
would take that course and make de-
posts in such national banks as would
give him the assurance that the money
so deposited or the credit based there
on would be loaned on cotton insured
or warehoused and at a rate of interest
not to exceed 6 per cent.
THE secretary declared he believed
there was no occasion for alarm about
the future Of cotton. and that If the
bankers and merchants would coop
crate with each other and with the
cotton producers Of the south In a
spirit of patriotism and mutual regard
for each others welfare the situation
could be handled with happy results
to all concerned. He expressed the
earnest hope that this would be DONE"