The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1915-08-17
LETTER OF INSTRUCTIONS
Advice Given On the Various
Points Involved Pledged
Cotton. Should Be Stored in
Public Warehouses and Re-
ceiptS Should Be On Stand
ard Form, Signed ManuaIly

The Federal Reserve Bank of Rich
mond its readiness through
it's member institutions to render any
assistance needed in financing the cot
ton crop of district served by it. In
this connection it has sent out to it's
member banks a letter Of valuable in
formation on the various points in
volved in it's relation to the interests
that have to do with the cotton crop.
A copy Of this letter has been fur
nished the News and Observer by Mr..
Joseph G.. Brown. president of the
Citizens National Bank. 1t is as fol-
lows:
In anticipation of the possible
needs of those soon to be interested
in the movement of the larger staple
crops of the country, the Federal Re-
serve Board. in a published circular,
has suggested to the several Reserve
Banks that they take steps to enlist
the active interest of member banks
in financing the crops, and to arouse
rOtnp and hearty cooperation of
those chiefly concerned, whether far
mer. merchant or manufacturer.
Richmond Bank Ready.
The Federal Reserve Bank of Rich
mond is able and ready, through it's
member institutions, to render any as
sistance needed in the district served
by it in this particular connection, and
at the same time to care fully for such
other current demands as may be
made upon it.
while grain crops will be heavy,
their ARE will hardly require special
thought or treatment, but should it be
found that their orderly movement
and their ultimate sale, free from IN
due pressure. can be promoted by any
service possible for the Reserve Bank
to render, such service will be avail
able.
The situation with respect to cotton
Is different and may require special
consideration. Pledged cotton should
be stored in public warehouses;, and
receipts should be on standard forms
which should be signed manually and
in ink. Evidence Of proper insurance
should accompany each warehouse re-
Ceipt. Certain warehouses issue in.
sured receipts. In such cases, it would
be proper for the interested member
bank to satisfy itself Of the capital re.
Sponsibility of the warehouseman and
he personnel of it's management, IL
order to be able to certify to the sam,
when called upon. In accepting an(
holding warehouse receipts from an!
source the Reserve Bank would ex
pect it's members to be in position, /
called upon. to verify the facts Sc
inspection or otherwise. Receipt
should show grades and weights o
the stored cotton, and must be in ne
gotiable form.
Use Collateral Notes.
Notes pledging the staple shoul
be OF the usual collateral form, givin
the right to call for additional Sc
curity in case of necessity. While tn
amount per bale advanced to tn
pledgor will be at the discretion G
II member bank, the Reserve Ban
in accepting such papers would dis
criminate in favor of transaction
fairly margined. 1t would be unwis
to await the actual presence Of
matured crop before undertaking t
make arrangements for it's fnancin
n the storage of SUCH part Of it 6
1T may be desirable to liquidate gradl
ally, and it, therefore, is recommend
ed that member banks at once pre-
coed to advise with their ~intereste
customers with the view Of havir
them promptly make advance a
Engagements, both with their bank ar
with their responsible warehous,
men.
"All notes must bear the endors
ment of a member bank, While IL
law will not permit the Reser
Banks to accept under discount not
secured by a pledge of cotton VIII,
the notes are made by those pu
chasing the staple for speculation
investment purposes, the Reser
Banks Will serve one OF their chi
and proper aims when they acce
from membe banks notes made
planters growing and owning the C
ton. by spinners who have bought
for manufacturing purposes, or
merchants accepting cotton in sett'
ment Of accounts or as security fro
w
Notes BY Planters.
Notes made by planters may
accepted by a Reserve Rand wh
having n maturity IN to six NOM
from the date on whxoh ~ ~