The Washington herald., 1920-10-22
BANKERSF0RM
HUGE UNION TO
SAVECOTTON
$4,000, 900 Foreign Trade
Corporation Gives Grow
ers $6,00G,00O.
SEE STABLE MARKET
Banks of South Taxed With
Problem Of Handling
Present Crop.

Organization by bankers repre-
senting twelve cotton States of the
South and a s12,OOO,O 900 foreign trad
ing corporation, operating under the
Edge act to especially alleviate the
cotton situation, was begun yester-,
day at a special meeting of several
hundred Southern fnanciers. Relief
| is promised growers to the extent of
s60,Oo0,oOO, of which S6,0OS,OOO be-
comes Immediately available. Cor
porations created Under this act are
empowered to do business to the ex-
tent of ten times their actual sub
scribed capital.
One of the primary objects of the
new corporation, it was stated, will
be to create a stable foreign market
for cotton.
Bankers Interested.
Among the bankers interested IN
! the new organization are: Robert +.
Maddox, president of the Atlanta
National Bank, Atlanta, Ga. II. s.
Hecht, PRESIDENT Hibernia Trust and
Savings Company. New Orleans; ].
Pope Mathews, president, Palmetto
National Bank, Columbia. S. c.; Tom
o. Smith, vice president Birmingham
Trust and Savings Company, Birm-
ingham, Ala; Moorehead Wright,
president Union and Mercantile
Trust Company, Little Rock, Ark; J.
ElwOOd Cox, Commercial National
Bank, High Point. n. C.; ]. A. Pond
som, first vice president South
Texas Commercial National Bank,
Houston, Tex; S. ]. High, Peoples .
Bank, Tupelo, Miss, and D. NJ. Arm
strong. vice president Commercial
Trust and Savings Company, Mem
phis. Tenn.
Robert +. Maddox, president OF
the Atlanta National Bank of At
lanta, Ga. and Haynes McFadden,
secretary of the Georgia Bankers
Association, were the leaders in
calling this conference which was
the outstanding feature of the after
noon work of the convention.
The s12,000,000 capital represents
an assessment of s1.00 per bale for
this years cotton crop with one
half of the capital stock paid in
Little Market For Cotton.
Maddox pointed out to the meet
ing that the formation of this cor
poration was not for the purpose of
controlling the cotton situation or
in holding movements for higher
prices. He said that the most
alarming situation confronting the
cotton movement was not the fact
that it had dropped from AZ to 20
cents a pound, but that even at the
prevailing price there was little
market for it.
"All hopes for any governmental
assistance seem to have passed." said
FaddoX
The banks of the South are taxed
with the problem of handling the
present cotton crop and inasmuch
as one-half of the 10000 bales
raised this year will have to be ex-
ported, the formation of the Foreign
/ Trade Finance Corporation to even
tually trade in all products of. the
/ South, but especially in cotton at
I this critical time, will tend to ere
ate a stable foreign market"
A telegram was read from Okla
homa stating that unless the cotton
situation improved not more than
/ half of the cotton in that State
I would even be harvested
Need New Construction.
The housing situation will not
] improve until new construction can
| be produced at a price which the
| home buyer and the apartment in
vestor can afford to pay. declared
! Leo Day Woodworth. of New York.
secretary of the savings bank divi-
| sion of the American Bankers AS
! sociation, when asked as to how the
| bankers view this national prob
/ lem. In explaining this general
| statement. Woodwork sad:
Housing is produced by the COM
bined use of the five principal items
| of land. operating capital, labor,
! material and investment funds-the
| latter including the amounts re-
| quired for the financing of both
| the permanent and the speculative
| portions of present value.
I'VE might even add as a sixth
| factor the initiative and manage
ment of the real estate operator,
I whether he be philanthropist or a
! speculative builder. Any person
with practical knowledge of real
estate matters will agree that the
speculative builder has by no means
been eliminated from sthe situation
and no reason has been advanced
as TO why ne Will not occupy the
same prominent position in this
work as before the war.
Can InderseII.
ut cannot be denied that he>will
market his product at a lower fig
ure than can any corporation which
operates on an accurate cost sys-
tenn and with expenses for engin-
eering and art work. AS his prod
uct is largely sold to persons who
are seeking better accommodations
than they had before, and who, in
/ the large proportion of cases, do
not discriminate very closely as to
actual quality, he can well afford
to undersell the more architecture
ally perfect construction of the
limited profit housing corporation.
Then there is the practical view
point which is before the banker at
all times when he Is asked to loan
on building operations or to take a
mortgage on the completed property.
The banker must look to the price
which he can obtain for the proper
ty in the event of foreclosure, and
not alone either to cost of construc-
tion or rental value or to present
ri af