The herald and news. [volume] (Newberry S.C.) 1903-1937, 1920-08-31
GOVERNOR HARDING
FOR CORPORATION
APPROVES ACTION TAKEN BY
FARMERS OF SOUTH CAROLINA
Saws Federal Reserve Board Pre-
pared to Render All Reason
able Assistance.
The News and Courier.


American Cotton association is
warmly approved by Gov. W. P.
Harding of the federal reserve board
in. a telegram sent by him to j. Skot-
towe Wannamaker, president of the
American Cotton association.
The telegram from Governor Hard
ing to Mr.. Wannamaker, which was
made public today, follows:
81. S. Wannamaker, president of
The American Cotton association,
Liberty National bank building, Co.
lumbia, S. C. Answering your tele-
gram, would state that the policy of
the federal reserve banks for many
months past has been so shaped as to
enable them to render all reasonable
assistance to member banks in facili-
tating the processes of production
and orderly distribution of essential
commodities, including the products
of mines and factories as we'll as
farms.
''The crop movement is seasonal
one, and in this early stage re-
quires large additional credits. Fed
eral reserve banks are prepared tc
meet all legitimate demands made
upon them by member banks for NOV
ing the crops, but your attention is
called to the fact that under the law
federal reserve banks can not make
direct loans. They can only reds
count for member banks, which in
stitutions are obliged to observe the
limitations prescribed by law upon
their loans.
Must Depend on Local Banks.
ssGrowers and distributors of agri-
cultural products usually have no
broad financial connections and are
obliged to depend for accommoda-
tions upon local banks, consequently,
notwithstanding the desire to re-
spond fully to the needs of farmer,
member banks frequently find it i'm
possible to extend all accommoda-
tions desired. Complaints are made
by wool growers and wheat farmers
as well as by cotton men of lack of
ready markets and of insufficient
transportation facilities.
's'The board urges cooperation be-
tween banks and producers in order
that the burden of carrying crops
awaiting transportation to market
may be as evenly distributed as pos
sible.
s'In actual sales and full returns
it is thought that the most pressing
needs of farmers can be provided for
without exhausting the credit faciii-
ties of local banks, which have their
legal limitations. I had an interview
yesterday with the minister of Cze-
cho-Slovakia, who stated that the sea-
sonal needs of mills in his country
alone for cotton amount to 100000
bales, but owing to deterioration IN
exchange and inability to ship gold,
it was impossible for the mills to take
anything like this amount of cotton
unless nine months credits are pro-
vided. He stated that the mills in
his country will be able to pay for
raw cotton furnished them as. soon as
manufactured and sold, and express
ed the opinion that a syndicate of
mills and banks in his country back
ed by guarantee of his government
could give satisfactory assurance of
payment at the end of the time speci-
fed.
Anticipated Situation.
''I anticipated the present situa-
ton in the year of 1919, when l
urged the formation of a large cotton
export corporation. Since then con-
gress has legislated, passing the Edge
act, under which these corporations
can be formed under a federal char
ter. Central Europe has the spinning
and weaving capacity, the mills and
the labor, but lacks raw material.
The South has the raw cotton. If a
corporation could be formed under
the Edge act taking cotton in pay
ment for stock there could be oppor-
tunity for direct dealings between
Southern producers and European
mills. A movement of this kind would
put new life in the market, for it
would stimulate buying by domestic
and British mills. The degree of
risk appears to depend upon the sta
bility of governments in central Eu-
rope and if capital which is not in