The herald and news. [volume] (Newberry S.C.) 1903-1937, 1915-09-03

money loaned. l think that we can
confidently expect that the banks il
the cotton States and in the agricul-
tural regions generally will content
themselves with a rate not more thar
one or two per cent above the rate
which they themselves pay. l hope
that the facts which you have stated
to me will become generally known
among the producers Of the country so
THAT THEY MAY FEEL THEM
SELVES FREE TO EXACT OF THE
BANKS WITH WHICH THEY HAVE
.GO DEAL WHAT THEY UNDOUBT-
EDLY HAVE A RIGHT TO EXPECT.
Sincerely yours,
Woodrow Wilson"
Note carefully that the president Of
( the United States tells you to feel free
to demand of the banks what you have
right to expect. -. -. ..........
To Finance Crop.
On August oath, Secretary McAdoo
announced that if it became neces-
sary he would deposit thirty million
dollars or more OF gold in the Federal
Reserve banks at ATLANTA, Dallas and
Richmond, for the purpose Of en-
abling the reserve banks to redlscount
loans on cotton secured by warehouse
receipts" He stated further that
this money would be deposited with
out interest charge, and that if it be-
come necessary he would make the
deposits directly with the national
banks which would agree to lend
money on cotton at rate not ex-
ceeding 6 per cent He also said that
for the time being the treasury de-
partment would charge no interest on
the deposits in Federal Reserve banks,
and justified his action by the unuS-
uaI situation respecting cotton, caused
by the European war, saying that he
considered it his duty to help the cot
ton producers of the South under such
, Conditions; that it was 'Eof economic
importance to the entire nation that
those who produce the cotton crop
shall have fair opportunity to dis
pose of it gradually and in orderly
manner, so that they may not be
forced to sell at sacrifice prices" THE
banks which are members of the fed
eral reserve system" he continued,
should make loans on warehouse re-
ceipts for insured cotton at low inter
est rates; that the banks can we'll af
ford to carry cotton for producers at
per cent, especially if they are able
to rediscount cotton paper at the Fed
eral Reserve banks at a much lower
rate than 6 per cent"
Under the law the federal reserve
board in Washington has right to
determine the rate of interest which
the Federal Reserve banks can charge
member banks on notes or loans Sc
cured by warehouse receipts, and |
have no doubt that the bankers in the
South will be quick to take advantage
of such powerful aid as they are as
sured by the federal administration
will be rendered them.
Just Returned.
have just returned from trip to
New York, in company with several
South Carolina bankers. 1 find that
the banks there with Southern CORE
spondents are ready to extend credits
based on State warehouse receipts out
side of the usual line for the current
needs of the banks. l suggest that
our local banks, in handling their Gus
toners notes secured by warehouse
receipts do so by rediscounts, and
where that is not practical, and it is
necessary for the banks to give their
own notes secured by farmers notes
and receipts for cotton, which in
creases the local banks liability on
bills payable, that the entry of such
liability be designated on the books of
the bank, and in the published state
ments, as bills payable secured by
South Carolina State warehouse re-
ceipts." By doing this, the Northern
banks will readily understand what
the abnormal amount of bills payable"
represents, whereas if they did not
they would be reluctant to handle the
notes of the bank. There are several
large banks which have expressed
their willingness to- handle State ware
house receipts for others than their
regular correspondents These banks,