New Britain herald., 1915-08-24
NEW NOTE TOBRITA|N
 ON C0NTRAbAND ACT
U. s. to Deposit $S0,O00,000 to
 Help Our Cotton Planters

American note to Great Britain on interferences with neutral trade prob- ably will be redrafted because of the British order making cotton con- traband.
 The note has been virtually com- pleted It now will be altered and probably will treat at length the question of the validity: under inter- national law, of Great Britain's latest action.
 While there is no intention to aban- don the claims for payment for cot ton seized prior to the British order, those cases now have a different status and a complete record of this phase of the dispute can be prepared and presented Cases under the con- traband order must all go before British prize courts, and there will be no informal negotiations, as there have been in connection with pre- vious seizures.
 Lodge Formal Protest.
 The new American note, it is un- derstood, will lodge formal protest against the placing of cotton on the contrband list and a lengthy d1plo- matic exchange probably will follow. It is considered likely by some off, cials here that the dispute eventual ly will be settled by arbitration.
 While the new formal note is in preparation, state department off, cials are continuing their informal ef- forts to secure the release of the millions of dollars worth of German and Austrian goods consigned to the United States TOW being held up at Rotterdam and other neutral ports IS a result of the British order-in-cOun- cil
 Unofficial representations to Great Britain have been authorized in an effort to bring forth further state- ment of the conditions under which these goods may be shipped without interference by the British feet Par ticularly officials here seek to learn the truth concerning reports that private interests in England have been arranging for the movement of certain consignments when the et- forts of the state departm ent's for eign trade advisers to secure permits for the shipment of similar goods have been unavailing since June 15.
 To Deposit $3O,OOO, ,OOO.
 Treasury officials last night made public an announcement by Secre- tray MCAuOO Illdt, III VlSW OI r -CIl6 action of the Allies in putting cotton on the contraband list, he would, if it became necessary, deposit $3O,- 900, 900 or more in gold in the fed- eral reserve banks at Atlanta, Dal- las and Richmond for the purpose of enabling the reserve banks to re- discount loans on cotton secured by warehouse receipts made by nation- al banks and state banks belonging to the federal reserve system.
 The gold would be deposited tem- porarily, at least, without interest charge. It was explained that if it appeared that the object could be accomplished with greater efficiency, thereby the deposits would be made directly with national banks agrec- ing to lend the money on cotton at rate not to exceed six per cent.
 McAdoo Authorizes Announcement
 Secretary McAdoo authorized the announcement from his summer home at North Haven, Maine. It came at the close of a day of specu- lation in official circles as to the nature of steps which the entente powers have indicated they will take to uphold the cotton market in the face of their contraband order
 Tn the exercise of the discretion given to him by law,'' read the treas ury statement, Secretary McAdoo said that the government will for the time being charge no interest on these deposits in federal reserve banks; that such action is justified by the un- usual situation respecting cotton caused by the European war; that he considers it his duty to use every available means in his power to help the cotton producer of the south in the circumstances, that it is a matter of economic importance to the entire nation that those who have produced the cotton crop shall have a fair op- portunity to dispose of it gradually l and in an orderly manner so they may not be forced, through inability to market their cotton gradually, to sell it at sacrifice prices.
 Basis for Enlarged Credit. The secretary said that one of 1 his chief objects was to create i basis for such enlarged credit in the ] south that the banks will have ample 1 resources to extend to producers 1 such accommodations that they will be able to carry cotton in warehouses for reasonable length of time un- 1 til it can be marketed advanta geous- ] ly. In order to accomplish this, he said, the national and state banks
 which are members of the federal reserve system should make loans on warehouse receipts for insured cotton ! at low rates of interest; that the 1 banks can well afford to carry cotton l for producers at six per cent. espe- i cially if they are able to rediscount
 cotton paper at the federal reserve 1 banks at a much lower rate than
 six per cent; that the credit resources l of the banks of the country are