The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1921-08-03
FEDERAL RESERVE BOARD
ANNOUNCES ITS POLICY

w ASmuStVAs Soiy So' Al 'AS" o~
the vital importance of the problems
incident to the harvesting and mar
keting of the coming cotton crop, the
Federal Reserve Board today held a
conference with the governors of the
Federal Reserve Banks of Richmond,
Atlanta, St. Louis, Kansas City, and
Dallas, the banks located in or
brought in closest touch with the
member banks in the cotton states,
for the purpose Of reviewing the cred
it situation in these states, and de-
ternining what further credit will be
needed to facilitate the harvesting
and orderly marketing of this crop.
At the present time the five Re-
serve Banks in question are lending
to their members $457,000,O00, or
more than 26 per cent Of the loans of
the. entire system, the Richmond
Bank borrowing from other Reserve
Banks $20,000,000 and the Dallas
Bank borrowing SIG, 100000 for that
purpose. The total loans of these five
Reserve Banks to their member banks
exceed their reserve deposits by
sSi92, 200, 900, whereas the reserve
deposits of the other seven Reserve
Banks exceed their loans to their
members by s11s,000,ooo.
The amount now loaned by these
Reserve. Banks to their members is
four and one-half times the amount
{ borrowed at any one time by all the
national banks Of the country prior
to 1914, or before the establishment
o the Federal Reserve System.
The Federal Reserve Board and the
Governors of the Federal Reserve
Banks announce that, the Federal Re-
!. serve $BanksS in addition to credits
already extended, are able and stand
ready to extend further credit for the
purpose of harvesting and marketing
the coming crop, in whatever amount
may legitimately be required, either
directly to their member banks, or
under a ruling now issued by the Fed
{ eraI Reserve Board; indirectly to nom
member banks acting through the
! agency and with the endorsement of
ia Mamber bank. These loans will be
{ n3ade by the Federal Reserve Banks
supon notes, drafts and bills of ex-
..changS ISSUED or drawn in accordance
! with the terns Of the Federal Reserve
! Act and the regulations Of the. FEEDER
az Reserve Board, for the harvesting
5ors ordefly marketing of the coming
cotton crop. ~
In order, however, that these redis-
count facilities Of the Federal Re-
4 serve Banks MAY be fully effective it
5 viii be necessary that member banks
In the cotton states place their loan
ing facilities freely at the disposal of
!: cotton producers and dealers in their
respective localities with the knowl-
tledge and assurance that the Federal
Reserve Board and the Federal Re-
serve Banks recognize the urgency of
rendering all proper assistance to
! these important interests During such
abnormal times. ... ~.
Il Mr.. Meyer, Managing Director of
the War Finance Corporation, who
attended the conference, reviewed
the activities of the War Finance Cor
poration in making loans for fnanc-
ign cotton for immediate and future
export. Governor Strong, Of the Fed
eral Reserve Bank of New York, and
4 representatives OF certain New YORK
member banks were also invited to
the conference to discuss the neces-
sity or advisability of having various
ommercial banks through the coun-
try establish fund for the purpose
Of making loans upon cotton. In view
Of the conclusions reached by the
conference as to the ability of the
Federal Reserve Banks effectively to
take care of all of the legitimate re-
quirements of the cotton interests, it
was felt that the establishment of
such a fund at this time is neither nee
essary nor advisable. Governor
Strong stated, however, that he had
received assurances from a number
of important banking institutions in
<ysI