The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1915-08-07
FEDERAL RESERVE BOARD II
SAID To HAVE WORKED OUT
Z PRACTICAL PLAN.
resources Under System VIII be
Available for Growers In Marketing
OF Their Products---Storagc and In
snrancc VIII Play Important Part
o ff New Plan.

worked out by the federal reserve
board. according to a letter received
oy y Columbia banker yesterday.
Tno board calls especial attention
TO the marketing OF the cotton crop
because IL In clearly to the common
interest that credits based upon this
crop, be protected as far as possible
from the danger OF Generalization.
IL Is shown by the board that no
staple commodity Is subject to greater
variations I'm prices than cotton.
Sudden and violent fluctuations, s.
says the board. ARE clearly to the
advantage OF neither the ioaning
hanks. the producer the manufacturer
nor the consumer They offer on the
contrary an inviting field for the spec
uIator," ...
As tho federal reserve banks are
prepared to rediscount the notes OF
farmers and merchants secured by
propef warehouse receipts for cotton
and accompanied by evidence of in
suranee. 1T Is suggested" reads a
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 production. II
they intend TO take advantage OF the
facilities offered by the banks for
carrying cotton. should begin 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 judgment of
each member bank.
The reservation OF storage space is
urged. While there Is not sufficient
warehouse capacity In the South"
says the statement. Ito provide stor-
age at any one time for the entire
cotton crop. II Is believed that there
are ample facilities for the proper
storage of all cotton that is likely to
be pledged as security for loans. In a
normal movement OF the cotton crop
warehousemen at concentrating points
estimate that the maximum storage
required VIII not exceed 20 per cent.
OF ire total receipts Tor 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 IL months. II is nevertheless i'm
portant because OF our lack OF ade-
auate shipping facilities as well as
restrictions brought about by the war
upon free exports To- all countries, that
ample means be provided for the
proper handling and effective market
ing ef cotton"
The statement directs special atten-
tion TO tho marketing of the cotton
crop. while the yield OF corn. wheat
and other cereals promises 10 be
large. there Is every reason to expect
thatseffrse products will find IA market
I'm an orderly way. Cotton. however,
is peculiarly sensitive TO abnormal
conditions such as now exist in our
expott trade. and II is clearly In the
COMPTON interest that credits based
upon this crop be protected as far as
possible from the danger of demoral-
izatiSh such rs existed during the au-
tumd of 1914. No staple commodity
is subject TO greater variations In price
than Is cotton. which during the past
IL years has shown. according to fig
uros based upon official quotations on
the New York cotton exchange. a..
average annual fiuctuation of 5.3S
cents per pound. the maximum price
range during any year OF this period
being lO.t cents per pound in 1904.
and tho minimum range 2.65 cents per
pound In 1906. II should he noted.
however. that with two exceptions.
there has been no great difference in
the average price of cotton for each
OF uhese ~ years. the exceptions be-
ing the year 1905 when the average
price during the year i'm New York
was 9.S cents per pound. the lowest
OF the 12-year period. and the other
being the year 1910 when the average
price per pound was 1916 cents; but
the average price for the entire L.
year period was IL cents per pound
Sudden and violent fluctuations arc
clearly 10 the advantage of neither
the loaning bank. the producer, the
manufactures nor the consumer. They
otter on the contrary. an inviting
field for tho speculator. and shOulC
tho federal reserve system. in max.
INK possible the more normal move
ment OF the crop. be a contributinl