The Chattanooga news. [volume] (Chattanooga, Tenn.) 1891-1939, 1920-10-08
NO BANK AID in
PRICE HOLD-UP
Head Federal Reserve Board
Suggests Cotton Men
Export Product.

Birmingham, Ala, Oct. s.-The fed
eral reserve bank is not an institution
for<lending money TO farmers In orders
that they may hold their crops tor
president of the board OF Governors OF
that institution. in a statement here
today.
Mr.. Harding arrived in Birmingham
with ID. =. Wills, newly appointed
member Of the federal reserve board.
for meeting of directors OF the At
lanta reserve bank. His statement was
made in reply to questions cQrcernng
the movement among southern planters
to hold their cotton for 40 cents a
pound, He explained that tho federal
reserve system was not established
to assist plans for holding Commodi-
ties off the market, nor is II at the dis
posal of speculative enterprises or or
ganized interests.
Mr.. Harding stated the best plan
he could suggest for encouragement or
the cotton industry in the south would
he the forma tionnbv~ the planters of n
cotton exporting company which could
supply the markets of Europe directly.
Erroneous Idea.
THE idea that has gone broadcast
through the country that federal banks
can help the farmer OF the south hold
his cotton for 40 cents by financing the
cotton crop, or aid the farmers of the
west get a high price for wheat by
rushing reserves to that section to boil
ster UP tn wheat crop is entirely Cr-
roneous," he said. MANY people seem
to think that AN they have to do is call
on the federal bank for aid and the
crop of their particular section can be
boosted up for a high price, or lowered
as they might desire, The federal bank
can do nothing OF the sort and will not,
because II is not It's function to aid any
section of the country TO maintain n
lt Ila.,
would be preposterous to think that tho
reserve banking system could go into
any one section OF the country and with
its influence say that one character OF
business or industry should be fostered
and maintained to the detriment of an
other, or that one particular business ts
sufficient for n certain locality. and all
similar enterprises should be diSCour-
aged. The federal bank is in the bank
ing business and does not deal with
the public. II deals with its member
banks. rediscounts / heir paper. en-
courages them TO make legitimate loans
for the increase of production and
through this channel hns placed in the
southwSGt more money this year than
was discounted In this section of the
country during the panic Of 1907.
Tho people OF the south and other
sections must depend nrst Of all upon
themselves II they would increase the
business of their particular section.
help the cotton crop, or any other
particular crop or industry Of a partic-
ular section. Then the federal bank,
through its member banks. can help
them.
Form Export Company.
THE best plan that / know for the
encouragement of the cotton industry
OF the south was suggested by me on
my last trip south, The southern cot
ton company that would supply tho
ton componv that would supply tho
markets Of Europe with the cotton they
need very badly If this was done the
southern cotton crop would find an
ample market that through the proc
eSseS of supply and demand would
maintain n fair price for this grent
staple"
Mr.. Harding stated he did not care to
go into the various phases Of the cot
ton situation In the south and the de-
mands being made on the federal bank
from parties in the south concerning
financing OF the cotton crop.