The Rice belt journal. (Welsh, Calcasieu Parish, La.) 1900-19??, 1915-08-13
FEDERAL RESOURCES ARE
AVAILABLE TO MOVE CROPS
Aim of Reserve Board Is to Avoid
Financial Stringency and Conges-
ton of Cropt This Fall.

signed to make available the resources
of the federal reserve system in the
annual fall movement OF crops have
been worked ont by the federal re-
serve board Writing to the twelve
regional banks, the board pointed out
in a letter made public Tuesday how
members of the system might help to
! finance the movement.
The boards action was taken, the
letter said, 10 forestall any possibility
| of congestion OF crops this fall for
lack Of financial accommodation to
move them and to avoid a recurrence
of the stringency which III the past
has marked this movement.
Although the board would apply its
plan to wheat, corn and all other
cereals, it devoted most attention to
the cotton crop, which, it said, was Pc
culiarly sensitive to abnormal condi-
tons such as exist in the export trade.
Usually the crop movement has
been taken care of by government de-
posts in banks or the issue of emer-
gency currency under the Aldrich-
Vreeland act, which expired last
month. In place of these agencies, the
board stated, there was ample author
ity in the federal reserve act to meet
the situation this year.
The board called special attention to
the marketing of cotton because 1t
was clearly to the common interest
that credits based upon this crop be
protected as far as possible from the
danger of Generalization"
It showed that no staple commodity
was subject to greater variations IN
prices than cotton end quoted figures
showing an average annual fluctua-
ton on the New York Cotton Ex-
change Of $3.50 per pound.
Sudden and violent fluctuations"
the letter continued, ARE clearly to
the advantage of neither the lOaning
banks, the producer, the manufacture
ers nor the consumer They offer, on
the contrary, an inviting field for the
SPECTATOR and should the federal re-
serve system, in making possible the
more normal movement of the crop,
be a contributing factor In reducing
these fluctuations. it would have &C
complished a great public good"
The board suggested that the re-
serve banks communicate with their
members and others interested and
, pointed out that cotton producers, If
; they hope to take advantage of the
+ facilities of the system for carrying
cotton, should begin arranging for its
b. proper storage and insurance as rapid
ly as ginned.
! Federal reserve banks" said the
letter, should particularly point out
q to their members that they are pre-.
a pared to rediscount the notes of farm
ers and merchants secured by proper
v warehouse receipts for cotton and &C
n companied by eyidenCeeof insurance,
Member banks, the letter said
which offer these notes to federal re
serve banks for rediscount should be
| ready to state the grade and market
| value of the cotton and the note
| should be in the customary collatera
! form, providing the right to call fo1
! additional security in event of ma
| terial decline In market value.
| 1.-THE amount to be advanced woult
| be left primarily to the judgment o
| the member banks, said the letter.
! The letter said that while there wa
not sufficient warehouse space in thu
South to take care of the entire cottol
crop, there probably was ample facil
| ity for the proper storage of all cotton
| likely to be pledged for loans.
| at should be made plain" the boart
| warned, that compliance with the es
| sential features of the plan herein out
| lined, modified as circumstances ma
demand, will be necessary for the moi
! NAL marketing of this years crop an
for the proper protection of those VIII
are interested in its movement
le whether banks, producers or manufaC
turers.
er while there seems to be no reaso
I'd to believe that the worlds present an
lg potential supply of cotton is out c
lr- proportion to requirements during tn
Is next twelve months. it is nevertheless
We important because Of our lack of adj
Is quate shipping facilities as well as RI
he striction brought about by the wa
RS upon free exports to all countries, tha
ample means be provided for the pro-
ed er handling and effective marketing {
EFF cotton"
he