TABLE 11.-Payments to producers made during the period Jan. 7 to Dec. 31, 1936, inclusive, compared with payments estimated on Jan. 6, 1936, as to be made, by commodities 1 1 1 Includes only programs involving rental and benefit payments, to be liquidated under Public, No. 440, 74th Cong. Liquidation of other programs, such as cotton option, cotton pool, and price adjustment payments, is being accomplished with funds from other appropriations and/or sources. Includes territorial tobacco payments. Includes territorial sugarcane payments. CHAPTER 8 THE COTTON PRODUCERS' POOL SALIENT FACTS ABOUT OPERATIONS OF COTTON PRODUCERS' POOL 1. Cotton covered by options issued to producers who partici- 2. Exercise of options by direct sale through December 31, 1936: Proceeds of such sales distributed among producers after 3. Operations of producers' cotton option pool through Decem- Number of producers surrendering options- Cotton covered by options surrendered 500-pound bales.. 4. Purchase of trust certificates from participants in pool, Cotton represented by trust certificates purchased 5. Total amount distributed through December 31, 1936 to pro- 2, 447, 000 132, 012 494, 145 $12, 766, 686. 37 443, 422 1, 951, 759 $51, 146, 516. 35 342, 618 $2, 965, 424. 47 $66, 878, 687. 19 Among the cotton producers who cooperated in the 1933 adjustment programs of the Agricultural Adjustment Administration, about 576,000 farmers agreed to accept options on cotton previously acquired by the Government through the operations of the Federal Farm Board and other loan agencies, as part of their payment for reducing cotton acreages. The options were issued at the rate of 6 cents per pound and through December 31, 1936, covered about 2,447,000 bales (500-pound) of actual cotton and of futures contracts. It was agreed that if the cotton were sold for more than 6 cents a pound, the profits would accrue to the producers holding options. The Government proposed to bear the loss if the cotton were sold for less than 6 cents a pound. The Secretary of Agriculture acquired about 2,482,000 bales (500pound) of actual cotton and futures contracts from the Farm Credit Administration, which previously had obtained the cotton from existing agencies. To this amount 149 bales were added through increase in weight in converting futures into actual cotton. Through December 31, 1936, producers to the number of 132,012 had ordered the exercise of their options on 494,145 bales of cotton, by direct sale at approximately 11.25 cents per pound. The proceeds of these sales, after the deduction of the option-purchase price of 6 cents per pound, amounted to $12,766,686.37 and was distributed among the growers ordering the sale of the cotton. On the same date there were options, unexercised, on about 1,023 bales of cotton. Some of these options were the subject of claims, some had been allowed to lapse, and some had not been exercised. From the Secretary's account, through December 31, 1936, there had been sold against surplus and through agents, a total of 39,758 bales of actual cotton and futures. I. POOL ESTABLISHED JANUARY 8, 1934 A producers' pool to handle the options of those holders who had not elected to sell their options direct was established on January 8, 1934, on the order of the Secretary of Agriculture, and a manager of the cotton pool was appointed. Contracts were entered into by and between the Secretary of Agriculture and holders of original cotton option contracts by which the manager of the cotton pool became the trustee of those holders of cotton options who elected to pool their interests. In order to facilitate the servicing of the actual or spot cotton to be marketed by the pool manager, contracts were made with the American Cotton Cooperative Association, New Orleans, La., and the Staple Cotton Cooperative Association, Greenwood, Miss. At the end of the calendar year 1936, option holders to the number of 443,422 had surrendered to this pool options against 1,951,759 bales of cotton, receiving in return participation trust certificates issued by the pool. To meet these options and cover these certificates, the Secretary had turned over to the pool 1,951,719 bales of cotton and futures. All pool cotton has been sold and all pool obligations paid, except the vouchers and certificates held in surplus for investigation and current pool expenses. The cotton pool not only made possible a larger return to cooperating farmers, but it also served as the marketing agency for the stocks of cotton acquired by the Federal Farm Board and other loan agencies. The pool's transactions were carried out without any appreciable effect upon the market and an effort was made to prevent the operation from interfering with the movement of cotton in ordinary commercial channels. II. PURCHASES OF TRUST CERTIFICATES INCREASED TOTAL Two cash advances were made to the holders of pool trust certificates. The first was at the rate of 4 cents per pound. A total of $39,035,180 had been disbursed under this advance to certificate. holders through December 31, 1936. A second distribution, at the rate of 2 cents per pound, less a carrying charge of 0.48 cents per pound, was announced August 24, 1934. By the end of 1936 a total of $12,111,396.35 had been distributed in connection with this advance. Funds for making the first advance of 4 cents a pound were borrowed from commercial banks; those for making the 2-cent advance were borrowed from the Commodity Credit Corporation. Amounts borrowed from the banks and the Commodity Credit Corporation were liquidated through sales of pool cotton and by advances to the Secretary of Agriculture by the Secretary of the TreasAll amounts advanced by the Secretary of the Treasury have been repaid through funds received from the proceeds of the sale of pool cotton. ury. Since August 24, 1934, the manager of the cotton producers' pool has purchased trust certificates representing 342,618 bales of cotton and futures from their holders, and has sold a corresponding number of bales on the market. From the prices paid for these certificates there were deducted: (1) The original option-purchase price of 6 cents per pound, (2) the 4-cent-per-pound advance that had been made on the cotton, and (3) carrying charges amounting to $2.40 per bale. Cash paid to the producers who sold these certificates to the pool manager totaled $2,965,424.47 through December 31, 1936. III. PAYMENTS TO PRODUCERS ON ACCOUNT OF POOL OPERATIONS The cotton obtained by the Secretary of Agriculture has been made the basis of the following payments, through December 31, 1936: To option holders who exercised their options by direct sale. $12, 766, 686. 37 To holders of certificates purchased by manager of pool_ - - Total_ 39, 035, 180. 00 12, 111, 396. 35 2, 965, 424. 47 66, 878, 687. 19 |