New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-08-24
MONEY
TO HELP SOUTH
CARRY COTTON
Treasury Ready to Deposit
$30,000,000 to Meet Con-
traband Order.
M'ADOO INSISTS
ON LOW INTEREST
Washington Hears New Protest
Against Allies Ban on Trade
Will Go to England.
IFrom The Trihuns Bureau /

From The Tribune Bureau
Washington. Aug. 23.-As the direct
result of Great Britain's putting cotton
on the contraband list, S90,O00,OOO will
be deposited by the Treasury Depart
ment in the Federal Reserve banks at
Atlanta, Dallas and Richmond to enable
them to redscount loans made on cot
ton secured by warehouse receipts.
The money will be deposited whenever
it may be needed, and S30,00O000 is
not the limit to which Secretary Nc
Adoo is willing to go. No interest will
be charged to the reserve banks on this
special cotton financing deposit.
President Wilson soon will address a
word Of warning TO the cotton growers
of the South. He will urge them not
to become panicstricken and, by throw
ing all of their cotton on the market at
once, when it has just been declared
contraband, disrupt business conditions.
He will urge them, it is understood, to
take advantage of the facilities of the
reserve banking system and to hold
their cotton for fair prices.
So far as has been learned, the Pres
ident will make no reference to any
negotiations with Great Britain, or to
any proposals that the British govern
ment may have with respect TO backing
the market or keeping up the price.
Confers with Reserve Board Head.
Another interesting development in
the cotton situation to-day was a con-
ference between President Wilson and
Governor Hamlin, of the Federal Re-
serve Board. Governor Hamlin will
make a speech before business men Of
Birmingham, his home town, on
Wednesday night, and he presented to
the President the details of the cotton
situation since the declaration of con-
traband, as seen by Southern fnanciers
and business men. Governor Hamlin
explained how the elimination of such
a large cotton market would affect con-
ditions in the South, and was told, it is
understood, the Presidents plan for the
solution of the situation.
Governor Hamlin declined TO discuss
is believed that the President told him
what he told Representative Lever, of
South Caroliva, as a result Of which
Mr.. Lever called off the cotton delega-
ton which was to have waited on the
President to-day.
II was reported to-day that the
President had made up his mind to
send strong protest to Great Britain
against declaring cotton contraband.
This report was received with some
surprise, as il had been understood
that officials of the State Department
were rather relieved that cotton was at
last on the contraband list and would
no longer be a continual source of
vexat,on when shipments were held up.
Comments from the South indicated
that il was expected better conditions
for marketing cotton would prevail, as
Great Britain would take an active in
terest in placing the cotton where it
was known il would be consumed in
neutral countries.
Trade Note To Be Redrafted.
The new American note probably will
be redrafted because of the British
order making cotton contraband. The
note has been virtually completed. 1t
will be altered, and probably will treat
at length the question of the validity
under international law OF Great Brit
aims latest action.
While there is no intention TO aban
don the claims for payment for cotton
seized prior to the British order those
cases now have a different status, and
a complete record of this phase of the
dispute can be prepared and presented.
Cases under the contraband order must
all 90 before British prize courts, and
there will be no informal negotiations,
as there have been in connection with
previous seizures.
The new American note, il is under
stood, will lodge formal protest against
the placing of cotton on the contraband
list. and a long diplomatic exchange
probably will follow. 1t is considered
likely bv some officials that the DISPUTE
eventually will be settled by arbitra-
ton.
McAdoo Stands by Farmers.
In announcing the plan to deposit
government money IN the South, Secfe-
tary McAdoo, who is in North Haven,
Me, insisted that the banks should
make loans to farmers at low rates of
interest.
THE banks can well afford to carry
cotton for producers at 6 per cent" Mr..
McAdoo said, especially if they are
able TO rediscount cotton paper at the
Federal Reserve banks at much lower
rate than per cent. The credit re-
sources of the banks Of the country are
greater than ever before in our history,
and there is no reason why the banks
should not, in cooperation with the
merchants of the South, help the cotton
producers with loans at low rates IN
the present peculiar situation"
Secretary McAdoo said that II 1t
should appear, however, 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 of in the Federal Reserve banks
he would take that course.
Georgia Representative Optimistic.
Representative Adamson, of Georgia
chairman of the House Committee on
Interstate and Foreign Commerce,
called at the White House to-day and
discussed cotton with the President.
He took a hopeful view OF the sltua-
ton. He said the bulk of the 100000
bales purchased yearly by Germany and
Austria Hungary was used IN manu-