Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1917-07-30
MONEY WILL BE LOANED
ON STOCKS OF POTATOES
Important Step Taken by Fedora,
Reserve Bnnk to Give
Aid To Farmers.

WASHINGTON, July 29.-Tho food
administration and the Federal Re-
serve Board. after conferences between
Governor Harding and Louis D. Sweet.
OF the food administration have agreed
upon plan for classifying potatoes
among the non-porishable staples. I'M
der section Is Of tho Federal Reserve
Act. in order that loans upon ware
house receipts for potatoes may now
be re-discounted at the Federal Reserve
Banks and thus become negotiable pa
per throughout the country at tho Fed
eral Reserve rate. which is now 5n most
States Ia per cent
Tho objective being, sought by the
food administration Is to stimulate tho
proper storage OF potatoes by growers
and others. and thus to enable the car
rying over of the large autumn potato
crop: also by enabling the growers and
local dealers to finance their potatoes
they Will be freed In large measure
from dependence upon spectators In
control OF the potato market
UNIQUE STEP TAKEN
IN MODERN FINANCING
in accepting the proposal OF the fncd
administration that tho Federal Reserve
Bourd classify potatoes as non-per-
ishable staple. unique step has heen
taken in the financing OF American veg
etablc products. and ono that brings
American banking practice into lin.
with practice in Europe, which huye
been SO material TO the preservation OF
potatoes throughout the year and the
stapilizatioR OF their prices.
The letter Of Governor Harding to
MIR. Hoover on this subject 10 as
follows
In reply to your inquiry through
Mr.. Lou D. Sweet, would refer you
to the regulations Of tho Federal Re.
serve Board, series OF 1917. and par
,icularly TO Regulation A. relating to
re-discounts under Section Is Of the
Federal Reserve Act. OF notes. drafts
and bills of exchange.
Section OF this regulation relates
TO commodity paper which can be re-
discounted for member bank under
the general terms OF the regulations.
but which may, IL 1t complies with tho
conditions laid down in Section 7. re.
discounted at preferential rate which
is now 3l-2 per cent in most OF tho
Federal Reserve districts.
Potatoes. properly graded and
packed. and stored in weather-proof
and ~csponsibie warehouse. as evil
denced by It's receipt. would undoubt-
edly constitute readily marketable.
non -perishablc staple. within tho moan
ING OF the regulation. The member
bank making loans against warehouse
recent Tor potatoes. properly insured,
would. OF course, have to satisfy Il.
SELF AS TO the margin Of it's security
ana the conditions of warehousing. but
after having done 80. and making the
loan. II could re-discount such paper
with the Federal Reserve Bank. for
periods not longer than ninety days"
1t Ia considered by tho food admin
lstration that this step taken by the
Federal Reserve Board is the most
important financial aid that has yet
come TO growers and consumers Of po-
tatoes. Moreover, IL will greatly as
sist local and State organizations and
authorities in providing and stipulat-
ing Increased and properly regulated
storage. In order TO make acceptable
warehouse receipts. II Will be ncccs-
sary for potatoes to be sorted and
graded. properly sacked and deposited
IN acceptable storage warehouses; thus
the preservation of potatoes and the
quality 10 the consumer Will have been
materially improved
Al a meeting recently held in Bos-
ton between representatives OF tho
various New England States and ron.
resentatiVes OF the food administra-
tion. II was determined by the New
England representatives to create ad-
ditional storage through their agen-
cies' and this step by the Federal Re-
serve Board will greatly assist such
activities through the United States.