The Birmingham age-herald., 1920-10-09
EXPORT TRADE WILL SAVE VALUE OF COTTON CROP,
 STATES HARDING
Governor of Reserve System Gives Views on Cotton Sit uation-DirectorS Discuss Changing Rate of Inter-
 est to ' Per Cent

"The best plan for saving the
 vaule of the cotton crop" said
 w. P. G. Harding, governor of
 the federal reserve system, "is
 to organize export cotton as-
 sociations. N Germany alone at this time is in
 need of 100000 bales, so I am in- formed by the commercial agent of
 that. country now in America. The | Germans know how to spin the cotton
 and they have the mills in which to !, spin, but their money is so appreciated
 that they cannot pay for it in cash With well organized cotton export | association we could ship our raw cot 1 ton to Germany under an adequate l guaranty by the German banks and the German government The cotton would be manufactured into cloth under this 1 guaranty and the cloth would be dis posed of to nations with means and whose currency has not appreciated. l In the end the Germans would pay us for our cotton in good American dol | lars.
 This system would have to extend over a period of nine months to allow for the shipment of the cotton tc Europe, it's manufacture and the sale of the finished product. "In my opinion the first 10000 bales of cotton that would be shipped abroad under this system and with this guaranty would have an instantaneous effect in stimulating the entire cot ton situation. To my mind it is the greatest opportunity in the south today THE SOUTH'S DUTY "It is up to the south to do this thing for itself and with its own money. The North cannot do it for the south. The north has money. but it likewise has use for all the money in Its possession. 1t is the duty and the opportunity of the southern people to do for them selves.
 Ihe German mark that is normally worth "A cents is now worth but 1 + cents. The commercial agent of the German government whom men tioned. told me that the suit of clothes which he wore, and was not more than an ordinarily good one. had cost him 5,oo0 marks and the shoes which he wore had cost him 800 marks Big as | that sounds, the values in our money were only $35 and $9.50, respectively. At the present rate of exchange "a pale or cotton would cost the Germans 5000 marks. They cannot purchase on that basis. The feasible plan is to sell them the cotton with guaranty of | their banks and government under a
 nlne months credit and wait until it IS made into goods. these goods sold ! in countries whose money is on a par ity With ours, and then the cotton pro- queer can realize on his cotton in good American dollars" Among other matters transacted by the directors of the Federal Reserve
 Bank of Atlanta in the meeting held
 In Birmingham yesterday were these: The question of changing the bnse rate of rediscount of Der cent with progressive features to Flat rate of per cent was refer red to committee. This cOmmit- lee will report back after an early meeting of all the governors of the federal reserve banks. to be held with the board members in Wash ingtOn at an enrly date. The matter of making provision for credits to the farmer to enable the liquidation of debt for fertilizers and
 the like was also referred to a com mittee to report later. This matter was presented by L. B. Jackson, of the Georgia State Bureau of Markets. in the following petition:
 To the Honorable Sixth Federal Reserve Board.
 Gentlemen: As an agricultural official of the state of Georgia I present this plea in behalf of agri- cultural paper that is rendered member banks.
 We ask that your circular No. G-l4o-A of date of June 19, 1920, be followed in that notes the proceeds or7which have been used for strict ly farm production, be exempted from the normal or ba zfo 1c. the discounting member bank as in the case of notes the proceeds of which are to be used for strictly farm production.
 We respectfully submit that if farmer presents his note to member bank and asks for loan to Iquidate wages, fertilizer or SUD- ply bills which he has incurred in strictly farm production the mem- Der bank should be permitted under Circular G-140-A to loan the money l and pass the papers on to the fed eral reserve, and same be 1 cmpted from the normal or basic line of the discounting member bank
 It is our view that when this farmer went ahead and procured these extensions of credit for strictly farm production he ma terially frightened the load on your paHk ana now, that ne wants to dlS- charge those obligations incurred Tor strictly farm production he should not be penalized for not having obtained the money from you in the spring or early sum- mer.
 In view of the fact that this money is to pay debts incurred in strictly farm production this money will only be out of your hands few days and will not materially affect your reserve By simply following the wording Of Circular G-140-A the foregoing request can be granted and by so doing it will not interfere with your general policy of deflation. but will protect and promote farm production which you have always declared yourself so ready to do. Viewed from all angles we see only good to result from the grant ing of this request that your Cir cular G-14o-A be followed. Re- spectfully.
 GEORGIA STATE BUREAU OF MARKETS.
 N-IA B. JACKSON. Director It was gathered from contact with
 the visiting bankers that the federal reserve system is going to continue it's
 policy of aiding in the adjustment of
 the finances of the country along the