The Coconino sun., 1920-07-16
REVIEWS CONFIDENCE IN
 WOOL TRADE BY LOANS

According to the Weekly News Let ter of the U. S. department of agri- culture, the federal reserve board has restored confidence in the wool indus try by suggesting plan for financing the wool-growers during the present emergency. By advance arrangement with the federal reserve board, wool growers, bankers in the wool-produc- ing sections and eastern wool markets, wool dealers, warehouse men, manu- |facturers, and others interested in the wool trade, held an all-day session with the federal reserve board. The condition of the wool market caused by the recent cessation of purchases of raw wool was laid before the board, and full discussion was had of vari- ous plans for financing the industry until normal buying operations are re- sumed. Unlike most other crops, wool is marketed in the spring and early summer, and the marketing conditions prevailing during the past month have threatened great losses to woolgrow- CTS which might be disastrous. Such a condition, if it developed, might cause serious sacrifice of sheep on farm and range and result in reduced supplies of wool and mutton in future years. It was clearly shown that there was no disposition on the part of anyone to maintain artificial prices, but simply to make arrangements by which the temporary interruption of the wool market would be removed and normal marketing conditions re- stored.
 The plan of action finally arrived at was adopted as more simple and sat isfactory way of dealing with the situ- ation than the cotton-loan plan of 1914 which had been suggested. At the termination of conference be- tween the board and subcommittee, consisting of bankers thoroughly fla miliar with the entire situation, the board authorized the following state ment:
 "A wool grower may ship his wool to one of the usual points of distribu- tion, obtaining from the railroad bill of lading for the shipment; the grower may then draw a draft against his bank for such an amount as may be agreed upon by the grower and the bank, secured by the bill of lading. The federal reserve act authorizes any member bank to accept draft secur- ed in this manner at the time of ac- ceptance, provided that the draft ma lures in not more than six months from the time of acceptance. After acceptance such draft bearing the in dorsement of a member bank is eligi- ble for rediscount or purchase by federal reserve bank, provided that 1t has maturity of not more than three months from the date of rediscount or purchase.
 It was suggested that the federal re- serve board communicate with the fed eral reserve banks, pointing out that shipments of wool to points of distri- button may properly be financed by ac- ceptances in the above manner"
 While the statement refers only to acceptances based on bills of lading, Gov. Harding referred those present to the provisions of section 13 of the federal reserve act as to eligibility for discount paper secured by warehouse receipts.
 At "a further meeting held last week of all interests concerned it was the unanimous opinion that the plan sug- gested above was practical and feasi- ble, and that no extraordinary diff culty would be encountered in the necessary financing to carry along the present seasons wool clip until nor mai buying market should reassert it. self, which it was the firm belief of all would be within a very reasonable length of time. All members of the conference have departed for their homes, feeling that the difficulties sur rounding the marketing of the present seasons wool crop have been satisfac- torily disposed of.