The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1925-08-10
RESERVE BANKS
help MARKET
CROPS
Cotton and Grain Acceptances
Are 40 Per Cent of Total in
March and April
By RICHARD HATTON

The great advantages Of the Fed.
erai Reserve System in assisting
In financing the marketing of crops
is indicated in a statement issued
by the Federal Reserve Board to-
day covering the purchase Of bank
ers' acceptances during March and
April. The facilities provided also
for the storage and shipment Of
American farm products have add
ed greatly to the lowering Of rates
and to the convenience Of shippers.
The Federal Reserve Board Bulletin
says:
"Of the bankers acceptances
purchased outright by the Federal
Reserve banks in March and Apri.
OF this year, 40 per cent, in dollar
value, were drawn to finance the
marketing of cotton and grain, ac-
cording to a statement by the Fed
eral Reserve Board, based on q
study which appears in the Federal
Reserve Bulletin for August is
sued today. Another 10 per cent
of the acceptances were drawn 20
finance the storage or movement
of other American agricultural
ton of farm products among the
commodities underlying purchased
aeceptances to so per cent of the
total.
During the two months included
in this study the reserves banks pur-
chased $247, 100000 of bankers ac-
ceptances, exclusive Of accsptances
bought under repurchase agree
ments. OF this amount $S7 100000
was drawn to finance imports,
81, 100000 to finance exports, $780,
O00, 900 to finance domestic trans.
actions, OF which a large proper
ton covered the storage of agricul-
tural staples in elevators and ware
houses awaiting export, and $24,-
000, 900 to finance the storage and
shipment Of goods between foreign
countries.
Before the Federal reserve sys-
tenn was established, this con-
venient and economical way of
financing the marketing OF crops
by the use of American bankers
acceptances was not available, and
a large part Of our foreign trade
was financed through the use of
acceptances drawn on foreign
banks, which involved the payment
OF commissions and discounts in
foreign markets. The FEDERAL re-
serve act made it possible for banks
in this country to accept crafts,
and the Federal reserve bar Ks, by
standing ready to purchase accept
ances have fostered an acceptance
market in this country, the extent
OF which is Indicated by the fact
that there are now outstanding at
different times OF the year between
$500, 100000 and $500, 200, 900 Of bank
ers' acceptances.
Through the acceptance market
facilities have been also provided
for financing the storage and ship
ment of American farm products by
exporters and cooperative market
ing associations at lower rates and
more conveniently than was posi-
BILE before.
The analysis made by the Fed
eral Reserve Board shows that ac-
ceptances purchased by the reserve
banks cover a wide range of diff
ferent commodities. During March
and April, import acceptances COW
cred 500 commodities, and export
acceptances covered over $50 COM
modities. The PRINCIPAL commodi-
ties underlying the $247 zoo. 900 of
acceptances purchased by the re-
serve banks in March and April,
combining acceptances in foreign
trade and in domestic transactions
were as follows.