The Daily Ardmoreite. [volume] (Ardmore, Okla.) 1893-current, 1921-08-31

1t will be remembered that a commit
tee Of Oklahoma oil men and bankers
conferred with the executive cimmit-
tee at Kansas city for the purpose Of
securing notifications Of the rulings
Of the board. Three proposals were
made by the members of the commit
tee. First was u request that 80 days
settled production be considered as
quick or liquid assets, second that
a reasonable valuation of the item,
stocks, stores or inventory. represent.
ing supplies and material on hand,
be regarded as quick or liquid assets,
and third that the note of an oil pro-
ducer should be eligible when the
proceeds were to be used for drilling
wells. The first two notifications were
granted at Kansas City, and the third
at Washington.
The Kansas City bank outlined its
modification in the following letter
which was sen- out TO members of the
committee:
Since the conference held July 90.
and August ), with our Executive
committee, by you as representatives
of member banks located in the oil
producing territory OF our district.
specializing in oil paper. consideration
has been given to your request for
modification in our present method OF
anayzing financial statements in re-
spect 10 determining the amounts of
quick and fixed assets. etc.
You are advised that our executive
committee has decided TO accede to
your proposal number one, that when
considering the financial statement of
an oil producer whose note is offered
for discount, fair and reasonable
valuation for 90 days settled produc-
ton will be considered as quick or
liquid assets; whereas ii has hereto
fore been our practice to classify such
as fixed assets II will be necessary.
however. for member banks offering
notes ON an oil producer whose state
ment. 10 be liquid production with
tied production to be taken into con-
sidcration. TO have attached banks
written statement certifying to the
amount ~ settled production with
which the liquid assets OF the borrow
or should be credited.
In regard 10 your proposal number
Two that a reasonable valuation of
the item. stocks. stores or inventory.
appearing on financial statement. rep
rcsenting supplies and material on
hand. be regarded as quick or liquid
assets. our executive committee has
decided that when examining state
menls Of an oil producer for lquidity
/ 10 will classify 50 per cent OF new
material as a reasonable value OF
material aud supplies, excepting ma
chincry ,n hand as quick or liquid
assets. II will be- necessary, however,
| that authoritative informgtion accom-
pany statements setting out the
quantity. character and value of such
new materials ana supplies.
The third proposal OF your commit
/ tee thar the Federal. Reserve Board
should rcscind It's ruling determining
| us ineligible a note uf an uil pro-
| duCcr. the proceeds OF which are used
| for drilling wells or FOR making per
| m1ncnt improvements. is question
upon which our directors or our exc
| cutivo committee cannot pass. but
is question which can only be- de-
lormlned by the Federal Reserve
board at Washington"
The request OF the oil men For re-
! cugniton NJ paper on loans to bC
used for drilling wells was beyond
q doubt the most important of nl
tor as IL generally known among tn,
members ot the uil fraternity, nnd
among everyone familiar with tn,
petroleum industry PRODUCTION already
brought to the surface will pay it'
own expenses ~ operation Fnsnc,
is needed hN the oil men FOR The drill
ing OF new wells and particularly
solely for that purpose The modifi
cations or the federal reserve banl
Will aid tu great extent preparation
~ NOTES of oil mcn in manner tha
will make "a much larger volume thar
heretofore eligible for discount opera
tors pressed for funds to prutec
ieastH by drilling offset wells will b,
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