The diamond drill. (Crystal Falls, Iron County, Mich.) 1887-1996, 1915-08-14
FEDERAL RESERVE
TO AID FARMERS
Plans For Banks TO Lend Money
For Marketing Crops.
HELP TO COTTON GROWERS
Producers Of That Staple Need More
Aid Because Of the Great Variation
In Price TO Rediseount Notes se-
cured BY Proper Warehouse Reosipts.
All institutions 10 co-opersts.

cured BY Proper Warehouse Receipts.
All institutions TO co-opersts.
Preliminary plans designed 10 make
available the resources OF the federal
reserve system in the annual fall
movement OF crops have been worked
out by the federal reserve board.
Writing TO the twelve regional banks.
the board pointed out how members OF
the system may help 10 finance the
crop movement.
The boards action was taken, the
letter says. TO forestal any possibility
OF congestion OF crops this fall or lack
OF financial accommodation TO move
them and TO avoid recurrence OF the
stringency which I'm the past has mark
ed this movement
Although the board applies It's plan
20 wheat corn and all other cereals. II
devotes most attention 10 the cotton
crop. which, IL says. Is peculiarly SEN
sitive 10 abnormal conditions such as
now exist In the export trade. The
letter says:
Helping the Farmers.
There should be no difficulty In ar
fonding the producers the assistance
necessary 20 enable them 10 market
their products In volume corresponding
to the power Of the trade 10 absorb
them.
"fn order 20 accomplish this end II
h suggested that federal reserve banks
adopt a definite policy with reference
to rediscounting paper secured by doc
uments In satisfactory form evidencing
the ownership OF stored agricultural
products. Through such n policy, to-
gether with proper methods OF ware
housing, federal reserve banks can be
potent factor In assisting the normal
movement OF staple agricultural prod
ucts from the field TO the factory or
| TO the consumer"
The board calls special attention to
the marketing OF the cotton crop be-
cause II is clearly to the common I'm
terest that credits based upon this crop
be protected "a far as possible FROM
the danger of Generalization" IL
shows that no staple commodity Is sub
| ject 10 greater variations I'm prices than.
cotton, which offers an inviting field
for the Spectator.
To Redisoount Notes.
Federal reserve banks should per-
| ticularly point out TO their members
that they are prepared TO rediscount
the notes OF farmers and merchants
secured by proper warehouse receipts
| for cotton and accompanied by evidence
OF insurance"
Member banks, the letter says, which
offer these notes to federal reserve
banks for rediscount should be ready
10 state the grade and market value OF
the cotton, and the notes should be In
the customary collateral form. provid-
ing the right 10 call for additional Sc
curity In event OF material decline In
market value.
''The amount to be advanced would
be left primarily 10 the judgment OF
the member bank" says the letter.
The board suggests that the reserve
banks call attention of their member
banks 20 the desirability Of reserying
storage space for such cotton as IL 10
be used as security for loans in iocalI-
ties where warehouse facilities are In
uoeQuhle. Iue iettcf says tudt. Wulit
there II not sufficient warehouse space.
In the south 10 take care OF the entire
cotton crop. there Is probably ample
facility for the proper storage OF all
cotton likely TO be pledged for loans.
While there seems to be no reason
TO believe that the worlds present and
potential supply OF cotton is out or
proportion 10 requirements during the
next twelve months. II r. nevertheless
important because OF our lack OF ade-
ouate shipping facilities, as well as re-
striction brought about by the war
upon free exports 10 all countries, that
ample means be provided for the prop
er handling and effective marketing OF
cotton"
Similar means may be taken 10 aid
In financing other agricultural prod
ucts, the letter says, wherever there In
! available n system OF warehouses, ele-
vators or other approved means OF
storing and certifying.