The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1915-12-29
DIRECT LOAN By
BANK ON COTTON
! O""N y" WI
RESERVE BOARD PERMITS NEW
ORLEANS BRANCH TO TRY
OUT NEW PLAN.

Washington, December 25.-Spe-
cial: One of several important
plans that are being considered by
the Federal reserve board, which is
seeking to perfect the new banking
and currency system of the United
States, with view to retaining for
this country after peace is declared
in Europe, the dominant position it
now holds in world finance, is about
to be tested at the New Orleans
branch bank.
The reserve board has granted the
New Orleans branch bank the prlvl-
lege of purchasing domestic accept
ances based on agricultural products
stored in the open market. If the
experiment is successful the reserve
board may recommend to Congress
the amendment of the National Bank
Act so that any national bank may
deal in these acceptanceS.
1t should be understood that the
acceptance form of banking is where
the paper is directly guaranteed by
the bank itself instead of by the pur-
chaser of the goods. This form of
banking is not so we'll known in the
United States as that done on COM
mercial note basis, where the bank
finances a transaction between others
Sentiment in favor of the accept
ance form of banking is increasing
rapidly, however.
|, Warehouse System the Key.
New Orleans has been selected for
the test of the domestic acceptances
innovation because that city is the
centre of the most efficient cotton
warehousing system in the country.
The effect of open market purchases
by the branch bank in New Orleans
is expected to have a prompt and
positive effect upon the cotton trade
throughout the South, and that all
business will eventually be benefited
if the experiment succeeds. 1t was
thought that cotton furnished the
best opportunity for demonstration
of the stabilizing influence of a sci
entific and up-to-date system of H.
nance.
The New Orleans bank will make
a rate of perhaps 4 per cent on the
domestic acceptances which it han
dies. This rate will be slightly
higher than the discount rate on the
same acceptances which would be
handled by ordinary member banks,
because in the case of the New Or
leans branch that bank will have the
entire responsibility of the loan. All
other, cotton territory will be inter-
ested in the result at the Louisiana
port.
Fight on Burleson.
Signs multiply that there will be a
fierce outbreak of pent-up Congress
sional fire against Postmaster Gener-
al Burleson, after the holidays. The
immediate cause is the reorganiza-
ton of rural routes in the various
States by the substitution Of auto
mobile vehicles for the familiar horse
and cart affair.
It is claimed by the department
that one autmobile route can handle
the work of several horse and wagon
routes and save the Government
money without hurting the service IN
any way. In some States hundreds
of rural carriers have been dropped
in the process of this consultations,
Congressmen, on the other hand,
declare that in many instances the
consolidation of ordinary routes in
to auto routes has resulted in serious
deterioration of the service. Most
of the Congressman who are on the
warpath against the department. on
this account admit that there are
cases where economy is possible by
combining routes according to the
departmental theory, but they con-
tend that a man or board of men
sitting at Washington with a map is
not competent to allow for the local
peculiarities of routes and often
makes bad blunders.
. It is the idea of the average Con-
gressman that he knows his district
better than the postoffice department
knows it, and he does not like to be
left out of consultation when ''econ-
omies" of this sort are Planned. LIS