Imperial Valley press., 1926-09-01
STORAGE RULES
FOR COTTON SEED
ARE IN EFFECT

Regulations for the storage OF
cotton seed under the United states
warehouse act have been 2romuI-
gated by tGc secretary of agrjcul
ture. effective Immediately. the de
partmcnt announced today. This
action has been taken after extend.
ed invest tigation relating to the
storage qualities of cotton serl and
the Kind of structures aud equip
ment required for proper storage.
Requests for Such action have been
filed with the department during
the past several wears by various
cotton seed interests and IaNker>
interested in financing this product,
Under the regulations only what
is generally known rs ''primc cot
ton seed may be stored. Thr re-a-
latiouS do not a,>plv to seed stored
for seek stock purposes. but solely
10 that stored for commercial pur-
poses.
Department officials say. ra3t
while the regulations may seem
drastic to some, it is felt that any
less strict regulations would tend
70 defeat the primo purpos" of ~tor-
age under this law. That purpose
jS the same for cotton seed - for
any other product st, rablr under
the law: namely, sound collateral
for loan purposes.
Before the regulations wee pro
mulgatyl preliminary draft was
discussed with bankers. cotton seed
oil and cru>Jer iuio,tsts ana mem
bcr> of tho fedc~al rr>ervc board.
Every precautlon has been taken I"
make the warehouse receipts ,ouu!
and arccptahIe collateral.
Is Readily Marketable
While the federal reserve board
sometime ago ruled that co;ton>red
when stored under proper conditions
is a nou-periShabie, readily mar
ketable staple agricultural predurt
within the meaning OF the fedora.
reserve act, II Il recent conference
held in the offices Of the teteral
reserve board. il developed tHa,
cottonSerd Very frequently is stored
in warehouses owned by the SANE
people that actually own the seed.
Under previous rulings of the beard
it WAS necessary IN such eases tol
the warehouses t. he leased Ia pat
ties having no interest in the pro-
duet in storage. This requirement
could easily be met, but the board :
ruling also required that the borrow
er should not have access t. the
premises in which the cotton >eea
was stored. A> cotton seed oil
men are Frequently the borrowers.
and as cotton seed has a tendency
to heat, if not OF proper moisture
content, the frlt they should haNa
the right "a inspect tn sect from
time to time 80 a. "a protcr- thrIr
own interests. This pha>r the
ooarI considered further and ruled
ON August % a> follows:
''Bankers acceptaHeeS secured
bv cotton seed stored in warchoasc
owned by the owner OF the cotton
seed but leased 10 an Independent
public warehouse operator under
bona filc lease. thr corporation ~.
sumjMg exclusive control and man
agcmcnt Of such warchou>c and op-
Grating it as a public warehouse
bonded and licensed under The Iuif.
ed States warehouse arr, may 10"
eligible for rcdiScoun' At fcd"rH.
reserve bank, although the owners
of the cotton seed are permitted
arccss TO the seed in storage AT
proper and reasonable times fer the
purpose only OF inspecting the CON
dition Of the seed, presided that ON
all such occasions the consent or n"
independent warehouse corporation
is first secured and that 'hr Owner
Of the seed ~ his representative iS
accompanied by e proper rcprcScn.
tativc of the warehouse corporation,
The department "f a-rirnltnr" Of
ficials state that the department $
regulations are in complete harmony
with the ruling of the federal re-
serve board.