The Manning times. [volume] (Manning, Clarendon County, S.C.) 1884-current, 1915-08-11
RESERVE BOARD TO AID
IN MOVEMENT OF CROP
Will Lend Money to Banks Who May
Use Notes of Farmers Secured
by Cotton Certificates.

Preliminary plans designed to
make available the resources OF the
federal reserve system in the annual
fall movement Of the cotton and 9TH
er crops have been worked out by the
federal reserve board. In a letter
addressed to regional banks tie
board have pointed out how the crop
movement could be financed.
1t is shown by the board that no
staple commodity is subject to great
er variations in prices than cotton.
Sudden and violent fluctuations
says the board, 'are clearly to the
advantage Of neither the loaning
banks, the producer, the manufac-
turer nor the consumer. They offer
on the contrary an inviting field for
the speculator.
AS the federal reserve banks are
prepared to rediscount the notes OF
farmers and merchants secured by
proper warehouse receopts for cotton
and accompanied by evidence Of in
surance, "it is suggested" reads
statement by the federal reserve
board, "that the federal reserve
banks point out to their members
and to the public generally, that
those who are engaged in cotton pro,
duction, if they intend to take advan'
tage of the facilities offered by the
banks for carrying cotton, should be
gin at once to arrange for its proper
storage and insurance as rapidly as
ginned." The amount to be advanced
per bale will be left primarily to the
jud dgment Of each member bank.
The reservation of storage space is
urged. ''While there Is not sufficient
warehouse capacity in the South,
says the statement, 'to provide stor'
age at any one time for the entire
cotton crop, it is believed that there
are ample facilities for the proper
storage of all cotton that is likely tc
be pledged as securitj' for loans. In
normal movement Of the cotton
crop warehousemen at concentrating
points estimate that the maximum
storage required will not exceed &c
per cent. of the total receipts for the
season"
The federal reserve board advises
that though there seems "no reason
to believe that the worlds present
and potential supply Of cotton Is out
of proportion to requirements during
the next twelve months, it is never
theless important because Of our lack
of adequate shipping facilities as vel
as restrictions brought about by the
war upon free exports to all coun-
tries, that ample means be provided
for the proper handling and effective
marketing Of cotton"
The statement directs special at.
tention to the marketing Of the cot.
ton crop. while the yield of corn
wheat and other. cereals promises tc
be large, there is every reason to ex
pect that these products will find 9
market in an orderly way. Cotton
however, is peculiarly sensitive to alb,
normal conditions such as now exist
in our export trade and it is clearly
in the common interest that credit;
based upon this crop be protected as
far as possible from the danger OF
demoraliZation such as existed dur.
ing. the autumn Of 1914.
''No staple commodity is subject
to greater variations in price than is
cotton, which during the post twelve
years has shown, according to figures
based upon Official quotations On the
New York cotton exchange, an aver
age annual fluctuation Of 5.38 cents
per pound, the maximum price range
during any year Of this period being
10.4 cents per pound in 1904, and the
minimum range 2.65 cents PEI
pound in 1906.
''It should be noted, however, that
with two exceptions, there has been
no great difference in the average
price of cotton for each Of these
twelve years, the exceptions being
the year 1905 when the average price
during the year IN New York was 9.e
cents per pound, the lowestaof the
twelve-year period, and the other be-
ing the year 1910 when the average
price per pound was 16.45 cents; but
the average price for the entire
twelve-year period was twelve cents
per pound.
Sudden h,and violent fluctuations
are clearly to the advantage Of neith-
er the loaning bank, the producer.
the manufacturer nor the consumer.
They offer, on the contrary, an in.
viting field for the speculator, and
should the federal reser-e system, in
making possible the more norma
movement Of the crop, be contri-
buting factor in reducing these fluc-
tuations, it would have accomplished
a great public good"
The carrying of products in behalf
Of spectators is not permitted under
the law and member banks can not
certify the notes of spectators as
eligible since the act creating the
federal reserve board does not allow
the rediscounting Of notes, drafts OF
bills Of exchange covering merely
investn. ents."
The statement concludes: "The
board will be prepared from time to
time to pass upon such special phases
of the crop moving problem as mem
Der banks may present to 1t through
the federal reserve agents, who are
brought into contact with the special
conditions prevailing In the various
sections of The country, and it will
adapt existing regulations to such
conditions as may have to be met in
facilitating the normal and economic
movement OF the staple agriculture;
products Of the country"
papers are again laying the blame for
tho trn11hla ON I ord Nnrthc1iffe 1t he