The Providence news. (Providence [R.I.]) 1891-1906, 1897-05-14
THAT COTTON.
UnWarranted Report Sent
From New Bedford.
Facts About the Course Pur-
sued by R. H. Deming Co.
When Bennett and Columbia Mill
Corporations Collapsed.

The following report was sent out from
New Bedford to the afternoon papers yes
to-day. 1t is entirely misleading and in
correct and tends to seriously affect tho
standing of the X. II. Deming Co., OF this
city:
New Bedford. Mass, May l3 r. II. Deminc
OF Providence has been in the city today con-
ferring wi tn the receivers of the Bennett and
Columbia mills in respect TO n settlement for
the alleged misuse Of something like 200
bales Of cotton belonging 10 X. IL. Deming ~
Co Of Providence, but held by several banks
n collateral This, II has been discovered
has been taken in various lots ana used by
the mills without permission. Deming q Co
had used their warehouse receipts as col
lateral for borrowing and much OF the cotton
was thus held by Providence banks.
The amount of cotton alleged to be so mis-
used cannot be stated. The attorneys say
that it will probably not exceed 1000 bales
The receivers, II Is said, have recently OBJ
tanned an opinion from high authority that
parties thus losing cotton held a, collateral
can recover its value in the finished goods
which have been made from IL. In this way
the receivers will probably reimburse the
banks.
The facts in the situation as between
the Pennett and Columbia corporations,
the r. II. Deming Company, and the
Providence banks who advanced money
ton in storage with the mills were known
10 The News shortly after the New Bed
ford collapse. They may now be briefly
cited as follows:
Methods In the Cotton Business.
1t is the general custom Of the cotton
mills hereabouts TO engage for several
months supplies Of staple, which the
broker or dealer ships to the MILL rcceiv-
ing receipt for the cotton. The purchaser
does not pay for the cotton at that time,
but gives his note for the commodity
with the understanding that the article
is not to be used until paid for, in the
meantime the purchaser storing and in
suring the cotton. This warehouse re-
ceipt. the broker or dealer could, ii neces-
sary, use as n means of SECURING loan
from the banks. should the mill pur-
chasing the cotton desire to use portion
OF Ii, the broker or dealer would be noti-
fed and the matter would he arranged so
that the amount desiredI cculd be taken,
for which the paymehT would then 10
made. At the present time this practice
is probably carried on in Providence to n
greater extent than elsewhere.
The Columbia and BGpnett mills Of
New Bedford are said to have purchased
cotton in this way, and when the banks
which had loaned money on thc:waro.
house receipt came To look about Tor col
lateral. it, or portion of it, was nowhere
90 be found. it having been used unbo-
known to tho brokers, and without boing
paid for, in direct violation Of the agree
ment The amount of cotton 80 misus ii
cannot be stated, but according To tho
experts figures, there are contingent liza
hili,ies, consisting Of cotton bought and
stored, in the case of the Colum bia of 1915
bales, and in the instance of the Bennett
of 6i04 bales, making total of TO- 90
bales, which II straight American staple,