The Washington times., 1915-08-26
president WARNS
BANKERS To TREAT
COTTON MEN WELL
w. p. G. Harding Reads Letter
From Wilson Asking for Low
Rates on Loans. =.
RESPONSIBILITY on BANKS
Financial Men Of South Must
Save Planters From Ruin by
Lending Funds.
RESPONSIBILITY ON BANKS

BIRMINGHAM. Ala. Aug 2s.-veiled
warning to the banks Of the South that
they will be expected to make advan-
tageous rates on loans to cotton pro
ducers was sounded in a letter from
President Wilson. which was read by
w. p. @. Harding. member Of the Fed
eral Reserve Board. in an address be-
fore the Alabama Merchants Associa-
ton here last night.
Mr.. Harding also pointed out to bank
ers the responsibility that rests upon
them in saving the cotton growers from
ruin.
An interesting part Of Mr.. Harding's
speech was his discussion Of the use OF
cotton In the manufacture Of explosives,
and his statement that exports to neu-
trafcountries may be taken as evidence
that Germany has been able to receive
cotton supply. regardless Of the efforts
Of the British allies to prevent It.
Had Loan In Mind. .
| President Wilson's letter was directed
not only as a warning to the banks. but
as bit Of informative advice to cotton
producers that they should insist on
favorable loans. Although no reference
was made to the $50, ,O0O, 900 loan which
Secretary McAdoo said the Government
would make to banks in cotton States,
1t was plain the President had this in
| mind
ut is evident from what you tell me-"
President Wilson said in his letter,
| no ha wit vyGn q
farmer and other cotton producers d.
| rectly deal. can get money at from 1
10. AZ per cent, and that the question
whether the benefit of this advantage
| Gus rate Is to be extended to the farm
er is in their hands. 1t is inconceivable
| to me that those who are responsible
for dealing directly with the producers
OF this country should be willing to
| teopa rdize the prosperity Of the country
Itself by refusing to share with the pro-
ducer the beneficial rates now obtain
able for money loans.
| II think that We can confidently eX-
pect that the banks in the cotton States
and in the agricultural regions gener-
ally will content themselves with rate
not more than ] or 2 per cent above
-"'" VANS Rate Demanded. ''s
Il hope that the facts which you
have stated to me will become generally
known among the producers Of the
country so that they may feel them
selves free to exact of the banks with
which they deal what they undoubtedly
have a right to expect"
Mr.. Harding declared that the South
has ample storage facilities for proper
ly caring for that portion of the crop
on which loans are apt to be negoti-
ated, and that the banks can command
| ample funds
| THE banking reserves Of this country
are now very large, being considerably
more than a billion dolla.s in excess Of
legal requirements, Mr.. Harding said.
The gold holdings of the United States.
over two billion dollars, are larger than
those of any other two countries COM
bined. Our trade balances are piling
UP at an unprecedented rate. and VIII
probably amount to billion dollars
Rates for the best commercial! paper
are very low. per cent or less. and
the Southern banks. should they be able
to collect within the next sixty days the
amounts which they have out directly
or indirectly on cotton, will be at an
: absolute loss to find a safe and profit.
able investment for their funds.
Good Security.
What better security. therefore
could IL Southern bank ask than the
obligation of Il merchant or farmer Sc.
cured by the actual cotton, properly
warehoused and insured, and certain
of a market"
, Mr. Harding declared that export NJ
, ures indicated that Germany is getting
a supply of cotton in spite of Great
| Britain's efforts to prevent it. He
gave cotton export figures for July
which have not yet been made public
t by the Commerce Department. showing
: that the total cotton exports were
. nearly double those of July. 1914, ant
p that aside from greatly increased sale.
, to the allies. 104, 400 bales were sent t
European neutrals which received 1900
= last year.
The belligerent governments are in.
!, terested in obtaining cotton supplies
r Mr.. Harding said. for use in manu-
. featuring explosives and smokelesa
!, powder.