Richmond daily register. (Richmond, Madison County, Ky.) 1917-1978, 1921-09-23
FEDERAL BANK TO
AID BURlEY Men
Reserve System To Honor Asso-
ciation Drafts When Proceeds
Are To Be Used For Farming

assurance of federal assistanc
for hurley tobacco growers, thr
organization of the Burley Grow
crs' Cooperative Marketing sAs
Sociation, was given today whe
the Federal Reserve Board issue
a ruling that growers drafts OF
the association, accompanied b.
weight tickets, will be eligibl
Tor rediscount at Federal Rcserv
Banks as agricultural paper, am
entitled to six months credit
provided the growers use tn
proceeds of the draft for agricul
tural purposes.
This action, it is said, will re
licve the tobacco farmers of tht
only possible difficulty in hnanc
ing their product through the
cooperative association now be
ing formed
AT a conference here last wcel
SIX representatives OF the Prehn
mary Committee of thel Burlcy
Growers Cooperative Associa-
ton urged that such ruling be
issued. Those who attended the
conference were Judge Robert
w. Bingham, Louisville chairman
James {. Stone. Lexington, vice
chairman; Charles \. Manning
Lexington; William L. Simms
Spring Station; w. Il. Montgom-
cry, Elizabethtown. and James C.
Wilson. Louisville. 70. -.
Following the conference, the
members OF the committee said
that while it is by no means nee
cssary for the association to have
the drafts classified as agricul-
tural paper. such decision will
be very helpful in completing its
financial arrangements.
w. p. G.. Harding. governor OF
tho Federal Reserve Board. today
sent letter to Judge Bingham.
advising him Of the issuance OF
the requested ruling. This letter
i'll part, follows
The Federal Reserve Board
has considered the question upon
which it was recently asked to
rule by number of gentlemen
representing the organization
committee of the Burlcy Tobacco
Growers Cooperative Marketing
Association. This question is
whether certain drafts drawn up-
Oh and accepted by the associa-
ton in accordance with the plan
now contemplated. should be
classed as agricultural paper. cl-
igible for rcdiscount at Federal
Reserve Banks. with a lrnturity
up to six months or should be
claSsed as commercial paper. ell
igible for rcdiscount only. when
its maturity is not in excess OF
ninety days.
"Thc federal reserve Board
ruled some time ago that drafts
drawn upon and accepted by CO.
operative marketing associations
in TRANSACTIONS similar to those
contemplated between the grower
and the Burley Tobacco Grow
ers' Cooperative Marketing Asso-
citation in the intsant case were
not trade acceptances within the
meaning of the boards regula-
\ti0ns. for the reason that looking
Nrough the form of these tran,
saStions and at the substance
thereof, the drafts represented
advancements made by the asso
citation to the growers rather
\ than partial payments of the pur
Chase price of the product deliv
cred to the associations.
Further consideration Of tn,
subject confirms the board in tn,
views expressed i'll its former rul
ing and you are advised, there
fore that in the boards opinion
drafts with fnaturities not in ex
cess of six months, drawn by TIN
growers, accepted by the Burle.
Tobacco Growers Cooperativ
Marketing Association and dis
counted by the growers wit
their endorsements, in accordanc
/, with the statements of facts con
tanned in this letter, will be elig
ible for rediscotiht at Federal Re
serve Banks as agricultural pa
per, provided the growers seth
proceeds of the drafts for agri
cultural purposes, and provided
also, the drafts comply III othe
respects with the requirement
of the law and the boards regr
lations."