The county record. [volume] (Kingstree, S.C.) 1885-1975, 1907-07-04
The PROPOSED scheme
OF COTTON BANKS.
4 CLOSE And CRITICAL ANALYSIS Of
THE SUBJECT And The SEVERAL
SIDES To IT.

p.SNESS - ~. '-!' 'N''N''~ Va 49,
readers. mcS; of :.om a. interested
in the subject discussed:
"Ne.c:.aHte wGo buy cotton and
Stcce il ale !: positive and consider
able fac:o- il fixing the prices of
the staple. fhuS. when the farmers
have sold ! large proportion of the
crop To co;tou merchants and it is in
tier hands, Their holding or selling
affects tie price which the spinners,
he ultimate buverS of raw cotton,
gay for il. When two million bales
Of cc.toa are in the hands of mer-
chants. they may be able, within
limitations. to dictate the prices
which rule ii the market.
The scheme of the Southern Cot
ton association, which was outlined
N or Columbia correspondence
yesterday, contemplateS organizing
the cotton producers into small
corporations whose business will be
that of cotton merchants, dealing
exclusively in "spots. - The farm
ers Of neighborhood are to sub
scribe enough money to build a
"s:audard warehouse That done.
they will deposit, which is to say
leuG, cotton to the company to be
used as its mercantile capital. The
company will proceed to hypothecate
the cotton it borrowS for the money
of the banks and will then buy more
cotton, taking the cotton Of the
negro farmer and the poorer farmers.
Heretofore, it has proved difficult
for the well-to-do farmers through
their associations to control the crop
raised by the tenant and one-horse
farmer. Their cotton, because they
cannot afford to hold, has passed
promptly into the hands of the
spinner or merchant. This object
of the new scheme is most excellent.
Presumably the farmers, organic
ing the concerns proposed by Mr. +
D Smith, will always strive to sell
their cotton for the highest possible
prices. Thus they will constitute
BODY Of "bulls. y The cotton mer-
chants that We now have may be
bulls or bears. Having no specia!
motive to prop the prices of cotton,
they may also deal in futures, SELL
ing or buying as judgment dictates,
and so their aggregate Influence
may be either to elevate or depresS
prices
We are not prepared to approve
nor yet entirely to condemn the new
plan of the Southern Cotton associa-
ton. Is it reasonably safe busi-
ress, that of farmers or others form
ing companies to deal in spot cotton:
Ask yourself-do you want stock in
a company which can hope to earn
dividends only by buying cotton and
selling it at an advance? The man
who deposits cotton with the COM
pany becomes, virtually, stock
holder to the extent of its value.
When the cotton is pledged at the
bank, it Will be subject to sale for
the debt of the company. If
prices slump, the company must
Put up more margin or it will be
sold, just as would shares of lail-
road or cotton mill company, pledg-
&c as security for loan. Exemp-
ton from storage fees and insurance
is, Of course, only nominal remunera-
ten ter capital contributed in the
fern Of cotton.
III short, the farmers who 90 into
these proposed cotton companies Will
pactake Of all the speculative dangers
which other cotton merchants invite,
unleSs the companies all over the
South are so numerous and strong
"bull' element, which can be re-
lied upon to throw their strength as
one man at all times, that they will
control and not be dependent wholly
on the voluntary whim of number
of independent organizations, which
is to say, corne: the market at will.