New-York tribune., 1918-06-08
Acceptances to
Displace Drafts in
Cotton Financing
New Plan VIII Be Recon-
mended at Meeting To-
day; Harding Approves

A radical departure in the method
of financing cotton from the grower to
the consuming mill is about to be un-
dertaken by bankers and leading inter
ests in the trade Formal recommen-
dation that the present method of pay
ing for cotton by sight draft be
abandoned, and the use Of ninety day
acceptances substituted instead, will be
made this morning when special
committee appointed to study the sit
uation meets at the Hotel Biltmore
to make public it's report. No doubt
is entertained that the recommends
tions will be approved.
w. P. G. Harding, governor of the
Federal Reserve Board, will be present
at to-day's meeting. 1t is believed that
he will indorse the plan, inasmuch as
he spoke favorably of it at the recent
conference on cotton buying, held
under the auspices Of the National
Association of Cotton Manufacturers.
Relations Unchanged
very much impressed with the proposal,
and asserted that the changes would
not involve the slightest disturbance
Of the relations between the local cot
ton buyer and the planter.
"The farmer gets cash as usual" he
added. 'The Southern bank is given
an opportunity of extending a long
credit. In other words it's goods which
have been against goods in posse can
become credits against goods in esse.
The crop when raised is reality and
credits against these acceptances are
credits against one Of the most readily
marketable staples in the world.
"under the acceptance arrangement
credit is not limited to the resources
of single bank or mill. The banks of
New York, Boston or other large cities
will undoubtedly give acceptance cred
it's to cotton mills. So there will be no
delay owing to lack of financial ar
rangements by the mills. So far as the
cotton buyer himself is concerned he
will save at his local bank and on his
warehouse and insurance charges, and,
considering everything, the balance.
think, will go on the credit side of
his account.
81 think, in the interest Of the cotton
VI Ohtl; III tllc lHlC1SoC VI Vic OOQtIlclll IL
banker, in the interest of the country
at large and in the interest of the
Federal Reserve System, it is we'll to
introduce this new plan if it can pos
sibly be done"
Will Require $130,Oo0,oOO
That the question of changing the
present method Of paying for cotton
is an important one is found in the
fact that the New England mills con-
sumo about 100000 bales of cotton
annually. At the present value of 80
cents for cotton the banks would have
to carry acceptances in the neighbor-
hood of $130,OOo,OOO if running for
ninety days.
The committee which has had the
plan under consideration consists Of
nine members, representing the spin
ners, the shippers and the bankers in
terested.
The shippers are represented by
Randall N. Durfee and Charles B.
Luther, of Fall River, Mass, and
Charles T. Plunkett, Adams, Mass
For the shippers there are Joseph
Newburger, of Memphis, Tenn; B. l..
Anderson, Fort Worth, Tex, and
Charles L. Tarber, Dallas, Tex. Acting
for the bankers are Hon. Theodore E.
Burton, president of the Merchants
National Bank; John E. Bouden. of
New Orleans, and e. L. Rice, of Mem
phis, Tenn.