The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1920-01-24
COTTON CREDITS
not RESTRICTED
Gov. Harding Denies That He
Made Statement That Loans
Would Be Curtailed
SENDS LETTER TO PRES
IDENT WANNAMAKER

Owners of Cotton viii Not Be
Disseminated Against By
Federal Reserve Bank
Colunia. Jan. IA vigorous de-
NAL that he had said anything in a
Z recent address before bankers in
Washington which intimated that loan
on cotton might be restricted by the
Federal Reserve System is contained
in a letter written by Governor W. r
G.. Harding OF the Federal Reserve
Board to J. Skottowe Wannamaker
president Of the American Cotton AS
soctat1on.
In making public: Governor Hard
ingss letter, Mr.. Wannamaker issued
this statement:
$50 many false statements have
been issued by the people who are
iesperately anxious to beat down the
price of cotton that It becomes abse-
lutelY necessary to disapprove the last
false. statement issued by them in
which it was claimed that Gov. w. 2.
6. Harding in his recent address be-
for the bankers had claimed that
cotton wRS being boarded and lntl-
mated that loans on cotton might be
restricted by the federal reserve sys-
tenn.
st have read every word OF this ad-
dress. in addition to this have letters
in my possession from Gov. ". P. G..
Harding, there is not a single SEN
tence or word in this address that
would in the slightest degree even in
eacate that it was claimed that cot
ton was being boarded and loans
would be restricted. In addition to
this Governor W. P. 6. Harding's let
ter speaks for itself. Governor. Hard
ing is.recognized as a man who stands
at nat only the head Of one of the
ggea1est banking. institutions In the
world but a man who is highly re.
specfed and honored on account Of
his great ability, his devotion to the
upb9lasng eof every section OF this
great Aatien. He knows no section
but tses his every effort at the head
sof this great institution and using it
for tie purpose for which it was in
tended the upbuilding of the entire
nation and not for the purpose OF ia
syor;ng any section or thrott!ing any
special industry.
Gov Hardings' letter to me reads
as follows:
4 have received your letter Of the
9Th instant and enclose, for your IN
sformation a copy OF my remarks at
the meeting Of bankers here on the
Sti, instant. I do not think that you
viii find. in them anything to war
rant the construction which was plac-
ed upoc them in some quarters. The
Board recognizes the importance OF
larger production Of farm products
= OF every kind and IS doing everything
&c can iegitin1ately to encourage and
not discourage production. AS pro
duction depends upon the market 1t
follows necessarily that any impair
meat Of a. broad open market Will
tend to discourage production.
'ss-ss. 1t has always been my belief that
manufacturers of cotton were really
benefited by a steady: level market as
free as possible; from violent fuctua-
I 4ions, for as long rs the market is
subject to radica! price changes they
are obliged to hedge by dealing IN
contracts on the cotton exchange ano
are often required to put up large
sums as margins in order to protect
: their contracts: 90 not believe that
:. the ultimate consumer was ever bene-
fitted by having supplies OF raw oct
ton fall into a few hands or by con-
eentrated control Of the market. If II
were possible for small group OF men
to acquire ownership Of all the cotton
in the country, they would demand a
large profit at the expense OF the con-
stlmer. The best protection to the
consumer, in my opinion, lies in the
ownership Of cotton by the producers
which means a widely scattered own
ersfip, and in steady sales of cotton
ns it arises.
e Such a condition would give the
producers the benefit Of the average
price of cotton for the year and would
prevent violent fluctuations in price
1t would at the same time. I think
give the consumer lover average
price than he would get If producers
were obliged to sell their entire hold
i.1gs during a period Of two or three
months, to purchasers strong enough
20 hold for such prices as they, might
choose to fix.
- in order to e.able the producer
~ market his crop in an orderly way
;it Will be necessary in many cases te
extend him some financial assistance
but this does not necessarily NEAR
excessive loans or loans which are
not amply margined. nor should banks
fiiscommode. themselves and impail
their ability to meet the requirement:
OF general business by aiding any one
to withhold large quantities Of cottoI
entirely from the market in an at
tempt to force up rrices artificially. II
order to avoid the great waste inciden
to eountry damage. it is essential tha
cotton held on the farms or at the
,co,rufv seatS he proDerIy warehQuSe(