New-York tribune., 1920-10-16
Cotton Men Ask
Suspension of
Rediscount Ban
Reserve Board Head, How
ever, Asserts Proposition
Is Too Intricate to Give
Definite Reply at Once
Fear Effect on Business
Southern Senator's Criticize
Interpretation of Federal
Act as Injuring Farmers

WASHINGTON, Oct. 15.-Represen-
tatives of southern cotton commission
merchants appealed to the Federal Re-
serve Board to-day for suspension of
regulations defining rediscountable fl
nancial paper in another effort to gain
relief from the credit "stringency"
which cotton interests declare has
struck the whole industry.
Propositions laid before the board.
however. were declared by Governor
Harding to be so intricate and to in
volve such serious questions that the
delegation, numbering thirty or more,
was given no definite reply. Five
southern Senators headed the commit
tee which was made up entirely of cot
ton factors or commission men and
bankers
Board members indicated they feared
the disastrous" results to business
generally, should the restrictions
about which the cotton men COM
planned be lifted. Suspension of the
regulations even temporarily, it was
said, would mean flooding of reserve
DdUhs WIN lcQloCOUIltS SOuEHC on D2-
per classified as similar to the obiga-
tions which the cotton men desired to
have accepted.
Not in Rcdiscount Class
Specifically the delegation asked
THAT the reserve banks be permitted to
redscount paper on which the COM
mission man had made advances to the
cotton planter Governor Harding de-
clared, however, that this form of
paper, even though secured by mort
gage on the planters crop. did not
come within meaning of the Federal
Reserve act, which defined the classes
Of obligations which might be redis-
counted. He said the loans represented
an advance on an option, the commits
sion man himself not being engaged
in either agricultural or industrial pro-
duction, as required in order that his
note might be rediscountcd.
Senator Smith, of Georgia, told the
board that probably half of the entire
years crop of cotton was tied up un-
der such paper. He urged "some sort
of help, even if it is only temporary
suspension of the regulations until
Congress can amend the law" He be-
lieved the change would be "readily
and easily made at the next session"
Board Criticized by Senators.
The board was criticized by several
OF the senator's, who declared it had
rot construed the law as it's trainers
had intended. Governor Harding re-
piled that the board had interpreted
the provisi ons of the act along what it
believed to be sound banking lines.
The conference of Federal agents
and Reserve bank governors with the
board was not concluded tonight, as
had been expected, and there were in
dlcatlons that the questions involved in
the proposal of the cotton representa-
tNes would be given attention to-mor-
rev. Governor Harding announced
Wednesday that the board was prepar-
ing to make q new statement of credit
policy as a result of frequent appeals
for financial aid from agricultural in
terests. He expected tonight to make
pubic the boards attitude on these
questions tomorrow.
Farmers Committee Waits
Meanwhile committee selected from
The agricultural representatives who
nave been meeting here was awaiting
the boards next move. This commit
tee was charged with determining a
course of action for the more than
thirty farmers organizations whose
representatives had laid their griev-
ances before various governmental
agencies
Two courses were under considera-
ton to-day in event the boards state
ment Of policy does not provide the
relief sought. One was the calling of
a general conference of all agricultural
interests to meet in Washington with
the convening of the next session Of
Congress and tho other was to ask
the support of the American Bankers
Association, which meets in annual
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