Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1902-09-08
WAREHoUSING COTTON.

The question OF holding back a part OF
the cotton crop and marketing the staple
slowly so as 10 meet the legitimate de-
mand OF the manufacturer for the raw
material has been a matter OF discussion
for several years. Such plan, II put into
general operation by the planters each
season would IN very short time sue
cessfully solve the problem OF how 70 oo-
tain the true value OF cotton before II
leaves the hands OF the producers.
The most feasible method suggested for
the rapid Inauguration OF this highly de-
sfrable system OF handling the crop on the
local markets BY the farmers was 10 place
the cotton IN warehouses and have re-
ceipts issued against IL by the warehouse
men using the receipts as collateral Tor
borrowing money from banks when nee
cssary 70 enable the owner OF the cotton
70 hold it. One OF the principal ooJec-
lions first urged against the plan BY banks
located especially IN the larger cities was,
that the ordinary receipt issued by the 10
cal warehouseman whose responsibility
vas unknown. might or might not be val
ID and safe
The banks on many occasions arrived
at this conclusion after advancing large
sums OF money on spurious and wortniess
warehouse receipts. which at the time the
money was advanced were thought 70
have been good. but afterwards found that
the supposed actual cotton they repre-
serted could not be found In many OF
the larger cotton centers In this ana oth-
er states thousands OF dollars were lost
some years ago in that way by the banks.
The banks were not caught by farmers,
hrrt by dishonest warehouEemel who were
using spurious receipts issued over their
own SIGNATURES and depositing them with
their bankers for the purpose OF securing
funds 70 speculate in futures and who got
on the wrong side OF the deal wrecking
themselves and causing losses 10 the
hanks.
Law Bonding Warehouses.
In many instances farmers also lost
their cotton which had been stored IN
warehouses which were being conducted
for speculative purposes. so that the leg
fsIat1rre OF Georgia I'm 1S9 passed law
40 bond warehousesmen. which would pro-
tect the owner OF cotton stored ana the
banker lending money on the warehouse
receipts. The whole object and intent
OF the law was 20 strengthen the security
and validity OF the cotton warehouse re-
CENTS. so that such receipts when issued
nv a bonded w1rehouseman would be safe
negotiable paper at any bank In the coun-
try. such receipts would either enforce
the proper delivery Of the cotton against
which Il was issued when demanded by
the holder OF owner or the bond OF the
Warehouseman would protect such holder
or owner OF the receipts against loss in
case the cotton had been flegitimately
disposed Of The following is a partial
COPY OF the act, which Is sufficient 20 give
the object and purpose Of the law, and
the plan by Which each local warehouse
man may easily make the receipts he is
sues gilt edge security:
section BE Il further enacted. That
every person OF corporation desiring TO be-
come a bonded public warehOuseman I'M
der the authority granted by the preced
ing section shall give bond 10 an amount
based on the estimated value said ware
houseman viii provide storage for. Said
bond shall be made payable TO the clerk
OF the superior court OF the county where
in such bonded public warehouse Is stu
afed and be conditioned for the faith
full performance OF his duties and liabili-
ties as q bonded public warehOuseman I'M
der the provisions OF this act. The surety
or sureties upon said bond shall be some
one or more Of the guarantee, surety,
fidelity insurance. or fidelity and deposit
companies which are described in section
OF an act entitled an act to authorize
solvent guarantee companies, etc. to be-
come sureties upon the bonds OF city,
county and state officials and providing
remedies against such bonds and for 9TH
er purposes approved December a. 1895:
all Of the provisions OF said act being
made applicable 10 the purposes and pro-
visions OF this act, so far as the same are
pertinent or applicable hereto; and 1t shall
be the duty Of said clerk Of the superior
court 70 tx the amount OF said bond. and
20 approve the surety Or sureties thereon