The Union times. [volume] (Union, S.C.) 1894-1918, 1915-10-01
GRANT LOW RATES
ON COTTON LOANS
RESERVE AUTHORITIES GIVE
SPECIAL. REDISCOUNT
Smith Describes It-Senator Thinks
New Facilities, With Short Crop.
Will Mean Good Prices.

VIII Mean Good Prices.
Florence, Sept. Ex-senator F.. d.
Smith was in the city a short while
this morning, returning to his farm
from Raleigh, N. c., where he, with
w. +. G. Harding of the federal re-
serve board, took different viewpoints
in the matter of loans from banks be-
fore the Chamber of Commerce of
that city. They had both been invited
to accompany Secretary Daniels to
his home to meet with this body. The
representative of the reserve board
viewed the transaction from the
standpoint of the bank, the senator
from the standpoint of the borrower.
The meeting was described as a most
interesting one, in which all seemed
to be in thorough accord.
Senator Smith says that the peonle
in North Carolina seem to be getting
their money cheaper than those in
South Carolina. In the North State
the rate of interest is said to be per
cent, while in this State report seems
to show at least one case where it was
10 per cent. He thinks that there are
many evidences of increasing prosper
ity. The outlook in the cotton belt he
thinks is the best in it's history. He
felt that the promise of the federal
reserve bank in Richmond to let the
banks that would lend the farmer at
per cent on his cotton have the money
to lend at 3 per cent would be most
gratifying and encouraging. He gave
out while here an authorized interview
in which he repeated the conversation
between himself and the board On
this matter, in which was the state
ment concerning the interest that
would be charged in this matter. The
governor of the board gave him the
assurance of the 3 per cent charge.
His statement is as follows:
Some weeks ago l met with the
federal reserve board for the purpose
of discussing the practical operation
of the new banking and currency law
as it relates to the farmer. I pro-
pounded certain questions to them, in
the form of a letter, to which letter
the governor of the board replied.
Among other questions propounded
was: What would be the rate of re-
discount? In other words, what in
terest would our regional reserve bank
at Richmond charge our State banks
that is, the national and member
banks of this State-on cotton certif-
Gates. I suggested to the board at
that time that in view of the fact that
cotton always was an extremely liquid
asset the world over and especially
now when the consumption by virtue
of this war and its uses as the basis
of high explosives, and in view of the
other fact that it was practically i'm
perishable. When properly pbtected
from 4 ire and weather, that + Aought
It A Rptitled to special I o.
ftass " psuAy ys'r-A<fst strTrrA sst<s ~
e"nor of the board and was infofhned
by him that the board had determined
on special commodity rate for cot
ton. l was informed that it had issued
q statement to member banks through
out the cotton belt that in case anv
bank would agree not to charge the
party or parties obtaining a loan on
cotton exceeding per cent that the
reserve bank lin our case Richmond.
would charge but per cent discount.
was greatly gratificd to see that at
last the commercial and banking value
OF cotton was being recognized by the
federal power.
Paper issued upon cotton properly
stored, insured and grade ascertained
and the ownership established, is un-
der the law the basis of the issuance
of federal reserve notes. Therefore
the local member bank that takes
such paper assumes practically no
liability. The cotton itself guaran-
tees the loan; now it does seem that
every national and member bank in
the South would gladly accept this
proposition. They receive the money
from the reserve bank at 3 per cent,
and give it to the maker of the paper
at per cent, which means gross
profit to them of 100 per cent with
practically no liability on their part.
Under such terms as these. with
the present prices of cotton every
FARMER who so desires can hold
part or all of his crop from the mar
ket without serious per cent of it's
value being taken up in interest.
The present crop is undoubtedly
one of the smallest that has been
made in years. The demand for cot
ton, both in this country and abroad,
has not abated particle. Therefore,
Withholding the cotton from me mar
ket and only selling it at will will
rapidly enhance the prices and tend
10 recuperate losses Sustained last
year. Under our present banking
and currency law, as administered by
he present officials, the financial
status of the seller is made annroxi= |