Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1921-11-17
The Federal Reserve System,
h4nd Food CROP Marketing

sAnd ROOD crop Marketing
59U1 ITH it's wonted keenness of insight
M into large questions of the day the
:, Augusta Herald brings to bear upon
the current discussion of market facilities
for Georgia food crops most timely and
fertile idea Answering the frequently heard
complaint that it is difficult if not impossi-
aJle to borrow money Ito make any crop
but cotton" the Herald observes that if this
sbe true there certainly is no reason for its
Continuing so eff spirit of cooperation can
be developed between farmers, merchants
and bankers" Let that spirit, with its re-
sultant means and methods, prevail ana
money will be procurable ''to raise all kinds
OF crops, as well as live stock" How So The
Herald explains in this wise:
=: Let us start at the beginning. If a
country bank is willing to take farm
er's note with proper collateral for
= loan, due within six months, the coun-
try bank, if a member Of the Federal
Reserve system, can Immediately dis
count this note and get the currency TO
make such loan. If the farmer is not
o., ready to pay the note when 1t comes
= due within six months and desires
new loan of six mnths in order TO
market his crop kradually, this can be
= secured, thus giving the farmer loan
practically for twelve months in which
stock, potatoes, hay or cotton, as the
case may be.
Touching this point, The Herald recalls a
recent and notable address by Mr.. Joseph A.
McCord, of the Federal Reserve Bank OF this
idistrict, in the course of which he declared
to an audience of farmers, bankers and bust
mess men at Athens that the Federal Reserve
bank has never yet declined to handle any
crop paper presented to it by the member
banks of the system. That the Federal Re-
serve bank makes loans, not to individual
persons, but only to banks :; d only to banks
that are members Of the system, should need
no re-stating at this late day. But the i'm
portant fact is that through member banks
the Federal Reserve stands ready to play
liberal part in meeting the needs OF diver
s)ifed farming within the limits OF sound
,fiance. Thus, as The Herald describes,
"a farmer may borrow money from his local.
bank, provided such bank is a member OF
the Federal Reserve system, for six months,
to make his crop of cotton or grain or to
raise livestock; and if at the end OF SIX
months he wishes to hold his products for a
better price, it is possible to place his cotton
ior grain in warehouse or elevator and use
the receipt thereof as collateral for new
loan in order to market his crop slowly, ana
gradually liquidate the Loan
Il AS a matter of course and Of necessity
these accommodations are confined to banks
.that avail themselves of t1e privilege of join
ling the deral Reserve system. Hence the
surprising AMI thought-provoking nature of
the fact that out OF total of one thousand
FIVE hundred and ninety-six State banks In
this district embracing Georgia, Alabama,
Florida, Mississippi and Louisiana; only sew
enty-seven are members of the Federal Re-
serve system. seven hundrd and thlrty-one
of these State banks, the Herald points out,
are now eligible for Federal Reserve mem
bership, while an additiL al seven hundred
and Lightweight could readily qualify by
small increases in their capital. ''It is safe
to say The Herald comments, "that if the
seven hundred and thirty-one eligible State
banks became members of the Federal Re-
serve system, millions of dollars could be
made available for the farmer and merchant
customers of these banks, in case the local
bank saw fit to extend such accommodation.
Fifteen hundred more State banks in this,
the Sixth, Reserve District, with the privilege
accorded member banks tC borrow or re-
discount agricultural and livestock paper, as
well as commercial paper, would soon relieve
any tightness of money tnat may be felt
among farmers and merchants. The
money is here to raise the Souths crops, to
finance them, and to market them gradually
provided the State banks care Cd to join the
Federal Reserve system, and CD to eXten
such accommodations to their customers"
Here, then, is factor of major import
ance in the great market problem with which
Georgia is concerned, Other factors and vital
ones there assureGly are, and each must be
financial snews the facilities afforded by the
Federal Reserve system should be borne in
mind and turned to account. Even with the
relatively small number of State banks now
having membership in the system, the Fed
eral Reserve bank at Atlanta renders sub
stantial service in this regard. On July the
first of the current year it either held or had
rediscounted for member banks some four
teen million, nine hundred and twenty thou
sand dollars worth of agricultural and live
stock paper, as compared with only six hun
dred and ninety-three thousand dollars worth
of such paper held on January the first, 1920
So has it's usefulness to farming interests
multiplied. The Herald aptly observes that
the approximately fifteen millions of farm
loans reported last summer could easily
have been increased to thirty millions or
more, if more country banks were members
o. the system and sought its accommoda-
lions for their customers" Light on the
problem of marketing Georgias food crops is
growing experiences are relate, are facts
are revealed and as suggestions are received
Let the campaign of education go steadily
on, followed by thoughtful and enterprising