The sun., 1919-07-02
CREDIT TO FINANCE
DRIED FRUITS CROP
Bankers Forming Syndicate to
Use Acceptances as the
Medium.
TO EXCEED $2O,OOO,OOO
Plan Has Aided Cotton FL
nancing and Millers Consid-
ering Similar Project.
70 EXCEED s2O,OOO,OOO

The use of bank acceptances as a
credit medium received stimulus yester-
day when 1t was announced that a syn
dicate Of twelve prominent banks and
trust companies of the United States Is
In process Of formation to extend credits
which will run considerably in excess Of
| $20,000.00o, to finance the California
dried fruit crop. The bugaboo of lack
of independent warehousing facilities
has been dispelled. so far as the Califor-
MIA production Is concerned. and a step
forward In the use or acceptances has
been taken as a result of a ruling by
the Federal Reserve Board to the effect
that readily marketable staples furnish
the security for acceptances, which are
rediscountable at the Federal Reserve
banks and purchasable by those institu-
lions In the open market.
There IL also growth in the financing
Of cotton by means Of bank acceptance
| credits, owing to the rapid construction
Of independent warehouses. The millers
are considering the use of bank accep-
tances on a large scale. and other lines
are making preparations 80 that their
products can be financed in that man
ner.
The credit for the California dried
fruit crop was negotiated by the bank
ing and acceptance Arm of Bernhard
Scholle Co, and the syndicate is rep
resented on the Pacific coast by the
Bank of Italy. A credit of $4,000, 900
has been granted to the California
Prune and Apricot Association. and a
credit OF 100000 to the California
Raisin Growers Association. Further
| 10
fruit products, as dried cherries, figs, wal
nuts. &c. And when the financing be
completed It Is said that the bills drawn
| under the credits will exceed $4,000, 900.
The final contamination OF the flnanc-
ing has been held UP for a few weeks
| awaiting, among other matters, decision
by the Federal Reserve Board as to the
| eligibility of the acceptances to be
drawn under the credits for purchase by
Federal Reserve banks or for redis-
counts. The point was raised whether
the transaction would comply with the
| requirements of the Federal Reserve
Board regarding readily marketable
staples. Approval OF the transaction and
Of the eligibility OF the bills has Just
been given by the Federal Reserve
Board.
The purpose OF these credits is to ar
range for the storage and marketing OF
crops. The credit will be a revolving
one, bills being drawn for thirty. sixty
and ninety days. commencing on July
and running until the spring of 1920.
1t will be the first time that the West
ern fruit crop has been handled through
the credit medium of bank acceptances
| Heretofore the crops have been moved
| with the assistance Of straight bank
loans.
The financing follows the recent ac-
ceptance credits of s50.000,000 granted
Belgium TO buy raw materials here, the
1925. 100000 Food Administration grand
export credit for moving the wheat crop
the American Tobacco Company credi,
of s25, 100000 and the 500. 100000 Gu
ban sugar credit. of which bills for only
about s1O,O00,0O0 were drawn. as 1t was
found that the funds could be raised a,
a lower rate abroad.