The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1902-09-16
Warehousing Cotton.

The question of holding back part of
the cotton crop and marketing the staple
slowly So as to meet the legitimate de-
mand of the manufacturer for the raw
material has been matter of discussion
for several years. Such plan if put in
to general operation by the planters each
season would in very short time sue
cessfully solve the problem of how to OBJ
tain the true value of cotton before it
leaves the hands of the producers.
The most feasible method suggested
for the rapid inauguration of this high
ly desirable system of handling the crop
on the local markets by the farmers was
to place the cotton in warehouses and
ahve receipts issued against it by the
warehousemen using the receipts as col.
lateral for borrowing money from banks
when necessary to enable the owner of
the cotton to hold it, One of the princi-
pal objections first urged against the
plan by banks locateda especially in the
larger cities was, that the ordinary re-
ceipt issued by the local Warehousemen
whose responsibilitg'was unknown, might
or might not be valid and safe.
The banks on many occasions arrived
at this conclusion after advancing large
sums of money on spurious and worth
less warehouse receipts, which at the
time the money was advanced were
thought to have been good, but after
wards found that the supposed actual
cotton they represented could not be
found. In many of the larger cotton CEN
ters in this and other States thousands
of dollars were lost some years ago in
that way by the banks The banks were
not caught by farmers but by dishonest
warehousemen who were using spurious
receipts issued over their own signatures.
ard depositing the mWith their bankers
for the purpose of securing funds to
speculate in futures and who got on the
wrong side of the deal, wrecking them
selves and causing losses to the banks.
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
is!ature of Georgia in 1890 passed a law
to bond warehousemen, which would
protect the owner of cotton stored and
the banker lending money on the ware
house receipts The whole object and
intent of the law was to strengthen the
security and validity of the cotton ware
house receipts, so that such receipts
when issued by a bonded warehouseman
would be safe negotiable paper at any
bank in the country. Such receipts
would either enforce the proper delivery
of the cotton against which it was is
i Il IL, LOlI On
owner or the bond of the warehousemen
would protect such holder or owner OF
the receipts against loss in case the cot
ton had been illegitimately disposed of.
The following is a partial copy of the
act. which is sufficient to give the object
and purpose of the law, and the plan by
which each local warehouseman may cas-
lily make the receipts he issues gilt edge
security:
Section BE it further enacted, That
, every person or corporation desiring to
become bonded public Warehouseman
under the authority granted by the pre-
ceding section shall give bond to an
amount based on the estimated value
said warehousoman will provide storage
for Said bond shall be made payable
to the clerk of the Superior court of the
county wherin such bonded public ware
house is situated, and be conditioned fol
the faithful performance of his duties
and liabilities as q bonded public ware
! houseman under the provisions of this
act. The surety or sureties upon said
, bend shall be some one or more of the
guarantee, surety, fidelity insurance OF
fidelity and deposit companies which are
described in section Of an act entitled
an act to authorize solvent guarantee
companies, etc, to become sureties upon
the bonds of city, county and State OF
ficiais. and providing remedies against
such bonds and for other purposes, APP
proved December a. 1896 all of the pro
visions of said act being made applicable
to the purposes and provisions of this
act SO far as the same are pertinent OF
applicable hereto: and it shall be thu
duty of said clerk of the Superior cour
to fix the amount of said bond, and Z
approve the surety or sureties thereon
"Section BE it further enact, Tha
whenever such bonded warehousemaI
fails to perform his duties as such, o
violates any of the provisions of this act
any person injured by such failure o