The Birmingham age-herald., 1905-02-08
REPORT INDICATES
 THAT MUCH IS LOST S8,OOO,o0O Lost Annually by Improper Handling of Cotton MADE AT NEW ORLEANS w. D. Nesbltt Submitted it As Part of Report as Chairman of commer.
 clal Club Committee at New
 Orleans Meeting.
MADE AT NEW ORLEANS

l the committee of warehousing and flnan-
 cing of the recent cotton convention. It | shows whereby $S,0OO,0oO may be saved an- l nually by proper warehousing:
 l Your committee having carefully con- | sidered the many plans of warehousing l and financing presented, deem it in advs- | able on account of the diverse conditions | in different sections of the cotton grow 1 ing states to recommend as a matter of l investment, or of security any one plan of warehousing cotton.
 l It is the judgment of your committee l that investment in warehouses should be | made as in any other lines of business. | such as banking or merchandising, ac- 1 cording to the needs of the special com munities and in line with the deliberate | judgment of the man who is investing his money. For this additional reason we | deem it unwise for this convention to l say to the farmer and the merchants by | it's endorsement that this or that plan 1 Is safe for the investment of their funds. 1 when necessarily we cannot know what the local conditions attaching to such | plan may be-
 | financing the balance of the present | crop. is, we understand, a committee to | suggest plans to meet the present emer- | geney and devise, if necessary, a tenn | porary system of warehousng whereby the present crop can be properly cared | for till sold. While the province of this, your committee No. Is to go deeply into | the general lacks of the warehousing | system and through pointing out it's deficiencies and great possibilities at tract the attention of the whole world to the opportunity for profitable investment | in this line of business and thus secure | by the investment of capital, local and | foreign, or if desired by local communi- ties a combination of both, those facili- | ties which We so badly need. Along this line we wish to present for the consider ation of the convention the following facts:
 Taking the cotton crop of the United | States at 100000 bales and the price at Sc. we have a commodity of OOO value We export about SSS6 GOO GOO, and we will say that one-half o. the crop. or | 6,000,000 bales. are stored for an average of four months each year in our ware houses or platforms as at present oper- ated at various interior points The average rate of insurance paid on | the cotton In these wareho' -es is not less than 3 per cent per year, or for four months about IF per cent so that insur- l ance on the 6,000.000 bales will annually amount to IF per cent on $24OO00Ol, or l $3, GOO GOO Insurance in the best ware houses of the south, such as are built by the cotton mills. with sprinkler, sys- tems etc. costs not exceeding A of per cent per year. 0r is per cent for ! four months, equalllng on s24O00O00O, $300,000. Thus If proper warehouses were ! built the saving on insurance alone would be something like S3,SO00oO per annum.
 The usual price paid for storage in the south is at least Poe per bale per month or for four months soc. Ware housing can be profitably conducted at | all points storing as much as 5000 bales at be per bale per month, or 60c for four months. an annual saving here on 5000 OO bales of Sl 200, ,001. On account of cotton be- | ing handled on the ground and left In the weather unprotected. what is called l country damage results. and on all that part of the crop shipped abroad. insur- ance against this has to be paid at a yearly cost of not less than $600G00. Be- sides this. the cotton left in the country on farms. even though placed on poles and covered or partially covered damages from wet and freezing mud etc, and as | in the present crop, where we Will say A. 0O0 GOO bales are thus exposed. We will have an average loss of not less than five pounds per bale or at Sc per pounds 40c per bale. total yearly loss of Sl6oo, | 0N0 On account of the fact that many l | not financially strong. and their sys- | tenn of handling careless and crude, their l cotton receipts are not considered good l collateral except locally and sometimes not then. The consequence is that those who wish to borrow on them must pay a l high rate to the man who Is willing to | take a risk for q possible good proht. | and they cannot reach the money of those l careful lenders who are willing 10 lend l af In p On a good risk. The average price of such money is not less | than T per cent With financially good | cotton receipts the rate would not be 1 exceeding per cent. a saving to the bor- rover on the above basis of not less than 1.5OO, GOO yearly.
 Thus in these items we would have through a proper warehousing system | saving on olir annual crop or not less | than $S ,600.00O
 | This loss each year comes out of the price of cotton, and the southern farmer | therefore pays the bill
 | Warehouses; frst-class in every respect. | including sprinkler system and plenty Of working platform and sheds, can be erect | ed at a cost of not exceeding Si0O per | 1900 bales capacity, or $4 per bale. ms. if we were to build brand new ware | houses we could erect them sufficient to store 5000 900 bales at cost of $24O00OO. | Taking the present warehouses and im- | proving them the cost to make them ade- ouate would probably not exceed one half that amount. Saving. however that
 the cost was $24,0O 000 and the storage charge was l5c per hale per month and
 storage lasted only four months, or COG
 per baIe we would have an income on the
 investment of S24, 100000. amounting to
 $3. 800 O00 or b per cent. The charges TOT
 weighing samplihg. etc. should pay the
 expenses of operation and leave 10 per | cent profit on the investment for me use
 of the warehouses for only one-tnifd oi
 their time.
 There are in the south In addition to
 cotton. immense quantities of other az
 ricultural and manufacturede products
 amounting to oyer $1.00O. .000.0oO, of which
 large part Is stored. or would be Ii
 facilities were offered: also many manu-
 factured articles for distribution through
 the south such as guano agricultural nm
 plenents. bugges. wagons. etc. all ol
 which need warehousing facilities These
 warehouses; therefore might reasonaDiy
 expect large revenue from these othei
 products and thus add materially tf
 their gain.
 Is this immense saving to the soutn
 this tremendous opportunity Tor the care
 ful investment of capital to be over
 looked. or should we not rather advertise
 to the south her duty as business people
 and to the world her opportunity TOT lh- vestment.
 Your committee recommends that tn.
 agricultural department or the several
 cotton growing states investigate tnor'
 o,ptlv the warehouse needs of tho differ
 ent sections of their states ana II heces' | sarv in order to obtain the needed stor- I a