Shiner gazette. [volume] (Shiner, Tex.) 1893-current, 1908-07-30
Proposed Plan for Finan.
cling Cotton Crop.


the people in many localities
were treated to a new kind of
circulating medium. The banks
did not have the money to take
care of their general run of bust
ness and at the same time
finance the cotton crop, so they
adopted the eXpedient of issuing
scrip" This scrip was issued
in denominations of 81, SIS, $40,
ETC., and each piece was in effect
a note, bearing interest, signed
by the officers of the bank, and
secured only by the good name
and the assets of the corpora
ton. If the bank was sound,
well and good. If virtually in
solvent Gas many banks were),
the holder of the scrip ran a risk
of loss. The fact Is that our
national banking system-"for
the benefit of the bankers"-is
not, when looked at from the
standpoint of the public, the
most beneficent of institutions;
at many points it breaks down,
to the great los of its victims,
the depositors.
Bank scrip, then, was not as
solid as Gibraltar, but there was
a lesson and an example in it
which ought to be valuable to
cotton growers if needed by
Them. If a bank can issue scrip
on insufficient security and
make it pass as legal tender,
why cannot farmers, through
the medium of their warehouse,
issue scrip (say to the amont of
$50 per bale) against the actual,
physical cotton, stored and in
sured in the bonded warehouse?
There is no better security in
rency is acknowledgements
the world; Uncle CAMS cur
rency is no better secured. There
is no danger of fraud; it is only
necessary that the thing be gone
about in a businesslike and legal
way.
The more widely the idea is
adopted and carried into effect
the more far-reaching the result,
but any local community can
adopt it without waiting on the
action of others.
On the other hand, no bank,
and no string of banks, has the
resources to advance money
enough to keep the cotton crop
off the market.
A form, simple, convenient,
embodying all legal require
ments, would be adopted, desig-
mating the union warehouse
manager as trustee and making
all scrip redeemable at the ware
house, providing that when a
given issue of scrip is not re-
deemed at maturity the manager
may, after giving due notice, sell
tn cotton against which the
scrip was issued. OF course all
proceeds over and above prlnci-
pal and interest and warehouse
charges would go to the owner
of the cotton.
But it does not seem likely
that this procedure would often
be invoked. In the first place,
of the plan were generally adopt
ed cotton would soon go above
the minimum price, and if it
didn't the enlightened merchant
would be disposed to take a new
issue of scrip so as to help the
farmer hold, and to take care of
exceptional cases it might be adj
vlsable to have state fund Cor
to have the state union make ar
rangements for the money! for
the purpose of holding distress
ed cotton off the market.
Under. this system you would
when your debts come due in the
fall, call upon your warehouse
manager to deliver to YOU $50 in
scrip, bearing fair rate of in
terest, against each bale of your
cotton. You would take these
crisp bills to your merchant and
offer them j npayment of your
account. Would he accept them
There are several reasons why
he should, and no sufficient one
that we know of why he should
not. He ought tohave no trouble
In liquidating his own obliga-