FALL IN COTTON PRICES.

Taranaki Daily News, 11 October 1926, Page 7

FALL IN COTTON PRICES.

ABUNDANT CROP EXPECTED GROWERS SEEK ASSISTANCE. PLANS FOR STORING OUTPUT By Telegraph—Press Awn.—Copyright. Washington, Oct. 8.

The situation of the southern cotton planters is so serious following the recent price declines that Senator Robinson has asked the White House for an emergency fund of 50,000,000 dollars to aid the growers.

Senator Robinson stated that the request was made to pave the way for legislation appropriating this amount from the Federal Reserve Bank. The money would be distributed through the southern banks. Meanwhile Texas bankers are planning loans of 50 dollars per bale at 6 per cent, merely on the security of warehouse receipts or chattel mortgages attached to crop mortgage notes now held bj them. This plan wae put forth at a meeting of 100 Texas bankers from all parts of the cotton belt, and at the meeting an acreage reduction campaign was also planned, seeking not less than 25 per cent, reduction of acreage and an increase in food crops.

A similar plan to retire another three million bales throughout the south will be launched immediately, which would make available of the present crop only 12,000,000 instead of 15,000,000 bales. Such bales taken off the market would be absorbed in the 1927 crop, which is expected to be smaller on account of reduced acreage. Bankers will be urged to convert some of their crop mortgages into new leant with chattel mortgages attached, also warehouse receipts, which are liquid assets in the cotton belt. The recent price decline has cost Texas 1,500,000 dollars daily for the last two weeks, but the fact that the State has one of the greatest feed crops in history is expected to enable farmers to weather the storm. Meantime the situation was rendered more to-day when the Department of Agriculture forecast gave an estimate of 17,000 bales more than previously was indicated. This caused a break on the New York market equivalent to 4 dollars a bale.

Cotton dropped 4 dollars a bale, the lowest level for five years, to-day, after the publication of the Government report indicating that the prospective yield would be 16,625,000 bales, an increase of 717,000 bales on the estimates of September 16.