Evening star., 1932-08-08
MEYER TO RENEW
COTTON STUDIES
viii Continue Conversations
Seeking to Dispose of
Federal Surplus.
BY the Associated Press.

BY the Associated Press.
NEW YORK, August 8.-Eugene
Meyer, governor of the Federal Reserve
Board, is expected this week to resume
conversations with New York bankers
looking toward the evolution OF COM
prehensive plan for the orderly market
ing of Farm Board holdings Of surplus
cotton
1t was said today that Mr.. Meyer
had broached a tentative marketing
plan last week. The amounts involved
were not estimated with any claim TO
accuracy by local bankers, but in the
cotton trade it was believed the hold
ines of surplus cotton, both in the stab
ilization corporation and the co-opera-
tive organizations, approximate $500
600 bales. This in dollar terms would
exceed 500, ,Ooo,0
Initial study of the proposal mas
aroused considerable enthusiasm among
certain bankers.
Must Close Out Surplus.
The banking viewpoint may be de-
6eribed as follows:
/. In orde; to have lasting value
any plan that is evolved must proVlde
for the gradual working off Of the
Farm Boards surplus holdings over
period of at least one year.
2 Any proposal for pool designed
solely to boost cotton prices would be
would be purely temporary, and would
merely pass the burden of financing
present cotton holdings from one set
of business interests to anothsr.
Some leading cotton brokers ex-
pressed frank skepticism as to the worth
of the idea, stating today that major
objection lay in the possibility that it
would interfere with the marketing of
the new crop while the mills were
taking care of the Farm Boards sur
plus left over from previous crops.
Plan Held Important.
But in banking circles it was said
that the idea should not be minimized;
that it is extremely important, and that
it is in no sense mere Government
venture into the field OF speculation,
but envisages something more lasting
than that.
In its present highly tentative form,
the plan would provide that govern
mental authorities encourage the cot
ton mills to order cotton for about one
wear in advance at price which mill
owners would decide would not entail
too great risk.
The banks then would be called upon
to help finance the project with the
understanding that the governmental
agencies would allow ample time for
the mills to make payment. This would
probably not be done until after the
mills had fabricated the cotton into
finished goods and had placed them on
the market.
Risk Is Summarized.
Bankers who feel that the Sugges-
ton of Governor Meyer contains great
deal of meat pointed out that mill
owners normally contract for cotton
some time in advance. The purchase
by them of years supply in advance
is not infrequent. And at present
prices, some leading bankers also feel
that there is not great risk involved
in buying cotton at present prices Tor
future delivery.
The possible effect that such a move
might have on planters has come in
for close study. One viewpoint which
commands considerable authority is
that the growers regularly plant as
much cotton as weather conditions
will permit. Therefore, exponents OF
this viewpoint do not look for a large
increase. In fact, some bankers feel
that growers, knowing that the mills
are stocking up quite literally with
present existing cotton supplies, might
be inclined to go little slow on en-
larging new paintings.