The central record. (Lancaster, Ky.) 18??-current, 1921-09-29
FEDERAL BANK TO
AID hurley MEN
Reserve System to Hon.
or Association Drafts
When Proceeds Are
To Be Used For
Farming.

Further assurance Of Federal as
sis,Ance for hurley tobacco grower
through organization Of the Burley
Growers Cooperative Marketing A..
ISOLATION. =as given recently when
the Federal Reserve Board iSsued a
ruling that growers' drafts on the
association. accompanied by weigh,
tickets. will be eligible for redis-
count at Federal Reserve Banks a.
agricultural paper and entitled 20
Sax months eerd.,; provided the
growers use the proceeds Of the
drafts for agricultural purposes
This action, j, Is said, will relieve
the tobacco farmers Of the only pos
sib.e difficulty 10 financing their pro
duet through the cooperative associa-
ton now being formed.
Al conference here last week siX
representatives. Of the Preliminary
COMMITTEES Of the Burley Grower
COOPERATIVE Association, urged that
suCh a ruling be issued. Those who
attended this conference were
Judge Robert W Bingham. Louis
vile. chairman; James {. Stone. Lex
ington, vice chairman; Charles y.
Manning. Lexi. gton; William r.
Simms, Spring Station; W. z. Mont
gomery, Elizabethtown, and James {.
Wilson, Louisville.
Following this conference. mem
bers Of the committee said. tina; while
IL il By no means necessary for the
association 10 have the drafts CLASH
fed as agricultural paper. such a de-
cision would be very helpful in com
pleting It's financial arrangements.
W ?. G. Harding, Governor Of the
Federal Re-erve Board. recently sent
letter 10 Judge Bingham. advising
him Of the issuance Of the requested
ruling.
This letter, in part. follow:
THE Federal Reserve Board has
considered the question upon which
IL was recently asked 70 rule by a
number OF gentlemen representing
the Organization Committee Of the
Burley Tobacco Growers Cooper
alive Marketing Association. This
question Is whether certain drafts
drawn upon and accepted By the as
ISOLATION IN accordance with the
plan now contemplated should be
classed as agricultural paper, eligi-
bic for Tediscount al Federal Reserve
Banks, with maturity up TO six
months or should be elassed as com
mercial paper, eligible for rediscount
only. when it, maturity il not in ex-
cess Of ninety days.
"The federal reserve Board ruled
som. time ago that drafts drawn up
on and accepted by cooperative mar
acting associations in transac tons
similar to those contemplated be-
tween the growers and the Burley
keting Association in the instant case
were not trade aeeeptanees within
the meaning OF the boards regula-
tons, for the reason that looking thru
the form Of these transactions and
at the substance thereof. the drafts
rather represented advaneements
made by the associations to the grow
ers rather than partial payments of
the purchase price Of the product de-
livered TO the associations.
Further consideration Of the sub
jeet confirms the board in the views
expressed in its former ruling and
you are advised, therefore that in
the boards opinion. drafts with ma
turtles not in excess Of six months,
drawn by the growers accepted by
the Burley Tobacco Growers Cooper.
alive Marketing Association and dis