Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1918-07-02
COTTON LOANS REDUCED
So Says Mr.. Stevenson's Corresponds
ents-Case From Sumter.

ents-Case From Sumter.
Tho question OF calling in cotton
loans by the Federal reserve banks IL
likely to become an acute one in the
south. Congressman Stevenson. who
has been following the matter closely,
gave out the following statement:
"On June Z, in short talk on the
floor of the house. stated that call
ing loans on cotton held 10y farmers
and difficulties Of shipping cotton
looked as ir it was done in the inter-
est of the manufacturer who could
buy the cotton and leave 1t where 1t
was. in the warehouse. David X.
Coker of the council of national de-
fcnsc for South Carolina and a direc-
tor in the Federal reserve bank at
Richmond, Va, published all over
the state Of South Carolina n denial
that the Federal reserve bank was do
ing it, to which replied, citing one
instance exactly in point. | now cite
n letter from the Federal reserve
hank at Richmond as follows:
"'Fcdcral Reserve Bank of Richmond.
Fifth District,
June II, 1918.
"'Pcoples Bank OF Sumter. 5. c.
Gcntlcmen: We have placed five
of the six notes amounting to s6,SOO
listed on your application of the 3lst
ultimo, to your credit today and re-
turn herewith the note Of c. c. Os-
teen for s7.7OO. The warehouse re-
ceipts for the cotton securing this
note arc dated in October and Novem-
her, showing that the cotton has been
held by the maker 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 II mt the highest price over known.
and we do not feel that banks should
lend money to any but those who are
engaged in manufacturing cotton
goods on the security Of cotton unless
the cotton has been held by the own
or or some one who. in turn. will
manufacture 1t.
"'Our government is in need Of
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 enterprise.
"'Vcry truly yours,
Thomas Marshall. Jr..
Assistant Cashier
1.-THE above letter confirms my
theory entirely that manufacturers
will I've financed to buy and hold
what farmers are to be forced to
sell and pay loans on 1t.
again in n letter from Eugene W.
Able of Saluda, s. c., quote the
following:
"T see in the State of today the
first mention Of your controversy
with Mr.. Cokcr about the Federal re-
serve bank calling loans on cotton.
hasten to write you that rs president
of the Saluda Wholesale and Ware
house company of Saluda, we have
had our loans to all intents and pur-
poses called by n member of the Fed
eral reserve bank and we saw in
structions from Richmond under
which the local bank was acting.
While these instructions were not In
so many words. the conclusion was
inevitable. As a result We have had
to unload several hundred bales Of
cotton at serious loss
81 quote from n bank and mill man
from another part Of the state who
says:
"'There is no doubt in the world
hut the Federal reserve bank officials
are behind the mill men in forcing
the 1917 cotton crop on the market
and not allowing the farmers to
hold for better prices when the mills
are making such an extravagant
price on their output. You hit 1t
right by saying they were making
800 per cent. Why don't you have
the governor OF the Federal reserve
hank appear before congress and tell
why they are forcing banks to call
in their loans on cotton? There Is
something rotten somewhere and
you southern congressman should
clear II out"