The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1918-06-29

federal reserve banks is likely to be-
come an acute one in the South. To-
day Congressman Stevenson, who has
been following the matter closely.
gave out the following statement:
ION June Z. in short talk on the
floor of the house. l stated that call
ing loans on cotton held by farmers
and difficulties Of shipping cotton
looked as II 1t was done in the interest
of the manufacturer who could buy
the cotton and leave it where it was,
in the warehouse. David r. Coker OF
the Council OF National Defense OF
South Carolina and director in the
federal reserve bank at Richmond,
Va, published all over the State OF
South Carolina denial that the f"d-
eral reserve bank was doing it, to
which I replied, citing ono instance
exactly In point. / now cite a letter
from the federal reserve bank at Rich
mond as follows:
Federal Reserve Bank of Richmond
Fifth District, June IL, 1918.
Peoples Bank of Sumter, S. c.
'Gentlemen:
1--WE have placed five of the six
notes amounting to s6,SOO listed on
yf,ur apNlicotior of .ho ot.t ,,,+;,..o A..
your credit today and return here
with the note of c. p. Osteen for ST.
700. The warehouse receipts for the
cotton securing his note are dated in
October and November, showing tina:
the cotton has been held by the MAX
er OF the note since that time. We
see no justification for his holding the
cotton at this time. when he has had
the opportunity to sell it at the high
est price ever known, and we do not
feel that banks should lend money to
any but those who are engaged in
manufacturing cotton goods on the Sc
curity of cotton unless the cotton has
been held by the owner or some one
who, in turn. will manufacture it.
Our government is i'm need o.
credit for the purpose Of prosecuting
the war, and only those can borrow
who can show that the transaction is
free from speculative features and
that the proceeds Of their notes are
being used in useful enterprises.
Very truly yours,
Thomas Marshall, Jr.,
"'Assistant Cashier
THE above letter confirms my
theory entirely that manufacturers
Will be financed to buy and hold what
farmers are to be forced to sell and
pay loans on it.
Again in u letter from Eugene w.
Able of Saluda. S c., quote the fol-
lowing:
Il see in The State of today the
first mention of your controversy wit =
Mr.. Coker about the federal reserve
bank calling loans on cotton. / hasten
to write you that. as president of tn :.
Saluda Wholesale and Warehouse
Company of SaluGa. we have had our
loans to all intent and purposes called
by a member of the federal reserve
bank and we saw Instructions from
Richmond under which the local
bank was acting. While these in
structions were not i'm so many words.
The conclusion was inevitable. As n
result we have had to unload sc ,eral
hundred bales Of cotton at serious
loss
Il quote from bank and mill man
from another part IF the State who
says:
There is no doubt i'm the worl.
but the federal reserve bank oflicial.
are behind the mill men in forcing.
the 1917 cotton crop on the marke.
and not allowing the farmers to hold
FOR better prices when the mills are
making such an extravagant price or
their output You hit it right by say
ing they were making 800 per cent
why don't YOU have the governor Of
the federal reserve bank appcar be
fore congress and tell why they are
forcing banks to call i'm their loans or
cotton? There is something rotte
somewhere. and you Southern con-
gressmen should clear 1t out.
He sends me letter from one o"
the great member banks of the section
from which I quote as follows:
There is so great prelude.
against the carrying Of loans on cot
ton tina. we do not feel yye con nossi