Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1915-08-03
STORED AGRICULTURAL CROPS
TO BE ACCEPTED AS COL.
LATERAL FOR LOANS.
RESERVE FUNDS AVAILABLE
FOR REDIscouNTlNG NOTES
Action Taken to ForestaIl Possibility
of Congestion During Fall Crop
Acknowledgment to Be Applied to
Cereals Wherever Storage Facilities
Are Available.

Washington, Aug. 3.-Preliminary
plans designed to make available the
resources Of the federal reserve sys-
tenn in the annual fall movement Of
crops have been worked out by the
federal reserve board. Writing to the
twelve regional banks, the board point
, ed~out in a letter made public today
how members of the system may help
, to finance the crop movement.
The boards action was taken. the
letter says, to forestall any possibility
Of congestion of crops this fall or lack
of financial accommodation to move
them and to avoid recurrence of the
strngency which in the past has
marked this movement.
Takes in All Small Crops.
Altho the board applies its plan to
wheat corn and all other cereals it
devotes most attention to the cotton
crop, which. it says. is peculiarly sensi-
tive to abnormal conditions such as
now exist in the export trade.
Usually the crop movement has been
taken care of by government deposits
in banks or the issue Of emergency
currency under the Aldrich- vreeland
act which expired last month In place
of these agencies the board states.
there is ample authority in the federal
reserve act to meet the situation, this
fall
TN view Of the large surplus re-
serves now held by the federal reserve
! banks, by member banks and by other
banks turnout the country" says the
board there has been no difficulty in
affording the producers the assistance
necessary to enable them to market
their products in volume correspond
ing to the power OF the trade to alb
sorb them In order to accomplish this
end. 1t is suggested that federal reserve
banks adopt definite policy with ref
erence to re- discounting paper secured
by documents In satisfactory form evil
dencing the ownership Of stored agri-
cultural products.
Can Lend Much Aid.
Thru such policy. together with
proper methods Of warehousing fed
eral reserve banks can be a potent
factor In assisting the normal move
nlent of staple agricultural products
from the field to the factory or to the
consumer It is recommended that
regulations governing the rediscount of
notes covering advances OF such pro-
/ ducts are actively engaged In financing
/ the movement of such crops to the
market"
/ The board calls special attention to
! the marketing OF the cotton crop be-
! cause it is clearly to the common in
terest that credits based upon this crop
be protected as far as possible from
! the danger Of decentralization" II
! shows that no staple commodity Is
| subject TO greater variations in prices
oh
F; :as al average ann"a! a"cts;s:sa.::::cn 81
| the New York cotton exchange OF 5.2s
cents per pound.
/ Sudden and violent fluctuations" II
! continues ,"are clearly to the advantage
/ Of neither the loaning banks the pro-
| Queer, the manufacturer. nor the con-
sumer. They offer, on the contrary. an
/ inviting field for the Spectator, and
| should the federal reserve system,
making possible the more normal
m overnent Of the crop, be a contribut-
| ing factor in reducing these fiuctua-
tons it would have accomplished a
great public good"
| Should Arrange Storage Early.
The board suggests that the reserve
| banks communicate with their mem
beers and others interested and point
out that cotton producers If they hope
to take advantage Of the facilities OF
| the system for carrying cotton. should
begin arranging for it's proper storage
and insurance as rapidly as ginned.
Federal reserve banks" says the
letter. should particularly point out
to their members that they are pre-
pared to re-discount the notes OF farm
ers and merchants secured by proper
warehouse receipts for cotton and ac-
companied by evidence Of insurance
Member banks, the letter says. which
offer these notes to federal reserve
banks, for re-discount. should be ready
to state the grade and market value OF
the cotton and the notes should be IL
the customary collateral form. provid.
ing the right to call for additional Sc.
4 curity in event of material decline IL
market value.
THE amount to be advanced would
he left primarily to the Judgment O.
the bank" says the letter.