The Madison daily leader. [volume] (Madison, S.D.) 1890-current, 1915-08-17


cured by Proper Warehouse Reoeipts.
All Institutions to Cooperate.
Preliminary plans designed TO make
available the resources of the federal
reserve system In the annual fall
movement of crops have been worked
out by the federal reserve board.
Writing to the twelve regional banks,
the board pointed out how members Of
the system may help TO finance the
crop movement.
The boards action was taken. the
letter says, to forestall any possibility
of congestion of crops this fall or lack
of financial accommodation to move
them and to avoid a recurrence OF the
stringency which in the past has mark
ed this movement.
Although the board applies Its plan
to wheat, corn and all other cereals. Ii
devotes most attention TO the cotton
crop. which, Ii says, Is peculiarly SEN
sitive to abnormal conditions such as
letter says:
Helping the Farmers.
There should be no difficulty in af-
fording the producers the assistance
necessary to enable them to market
their products in volume corresponding
to the power of the trade TO absorb
them.
"In order TO accomplish this end Ii
Is suggested that federal reserve banks
tdopt a definite policy with reference
TO ~rediscounting paper secured by doc
uments In satisfactory form evidencing
the ownership of stored agricultural
products. Through such a policy, to-
gether with proper methods OF ware
housing. federal reserve banks can be
n potent factor In assisting the normal
movement OF staple agricultural prod
ucts from the field 10 the factory or
TO the consumer"
The board calls special attention TO
the marketing OF the cotton crop be-
cause IL is clearly to the common in
terest that credits based upon this crop
be protected as far as possible from
the danger OF Generalization" Ii
shows that no staple commodity Is sub
ject to greater variations I'm prices than
cotton. which offers an inviting field
for the SPECTATOR.
To Rediscount Notes.
Federal reserve banks should par
ticularly point out to their members
that they are prepared TO rediscount
the notes OF farmers and merchants
secured by proper warehouse receipts
for cotton and accompanied by evidence
of insurance"
Member banks. the letter says, which
offer these notes TO federal reserve
banks for rediscount should be ready
to state the grade and market value of
the cotton, and the notes should be I'm
the customary collateral form. provid-
Ing the right to call for additional Sc
curity In event OF material decline I'm
market value.
The amount to be advanced would
be left primarily to the judgment OF
the member bank" says the letter.
The board suggests that the reserve
banks call attention of their member
banks to the d%esirability OF reserving
storage space for such cotton as il to
be used as security for loans I'm locall-
ties where warehouse facilities are In
adequate. The letter says that. while
there Is not sufficient warehouse space
In the south to take care of the entire
cotton crop, there Is probably ample
facility for the proper storage Of all
cotton likely to be pledged for loans.
while there seems to be no reason
to believe that the worlds present and
potential supply Of cotton is out OF
proportion to requirements during the
next twelve months. 1t is nevertheless
important because Of our lack Of ade-
quate shipping facilities, as well as re-
striction brought about by the war
upon free exports to all countries, that
ample means be provided for the prop
er handling and effective marketing Of
cotton"
Similar means may be taken to aid
In financing other agricultural prod
ucts. the letter says, wherever there is
available a system of warehouses, ele-
vators or other approved means of
storing and certifying.