The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1910-07-25
Cotton Bills Of Lading Must
Be Regular to Be
Negotiable
COTTON MEN REALIZE
DANGER OF THE MOVE
Stand Taken BY Englishmen Would
Threaten the Collapse of Impor-
tant Commercial Interests If
Carried Out

new orleans, ldt july W -'A ~%-S
harvesting of the cotton of the south
already begun. in the early sections and
the time fast approaching when the
crop will begin to move in in even the
more northern states, southern bankers
and business men are now hard at
work on the problem presented by the
recent action of European bankers in
connection with bills of lading on the
chief staple of the south.
At a meeting of London bankers last
Thursday a resolution was adopted to
the effect that beginning in November
American cotton bills of lading shall
be negotiable only when they are guar
anteed by an American banking insti-
tuition. The action grew out of the
frauds alleged to have been perpetrated
through forged bifls of lading issued
In Alabama, resulting in the loss sew
eral months ago of millions of dollars
to continental firms and litigation in
Birmingham.
The cotton men 'of the south realize
that the commercial interests of vast
Importance, amounting to almost COM
plete revolution in the cotton trade
from what 1t recently represented
through the hands of factors. will col
lapse through the stand of the English
bankers. Many state that in the event
of American banks refusing to honor
cotton bills of lading the business of
the south would be paralyzed and a
cash basis produced which would drain
millions of dollars from the monetary
channels and centers of the south into
the east. Under present financial con-
ditions 1t Is asserted the cotton men
of the south could not meet their credit
balances. Southern bankers who have
expressed opinions seem to doubt
whether the banks, in justice to them
selves, can assume such a RESPONSE
bility as guaranteeing to banks abroad
the certificates to secure commodity.
Foreigners Are Dependent
Cotton exported by this country Eu-
ropean manufacturers are dependent
upon and the statistics furnish evidence
that labor during the fiscal year ended
June 80, 1910, had total value of
one-third of that equal to $417.S90, ,665,
given as the crop total and exceeded the
combined value of the four principal
grain crops given out by the depart
ment OF agriculture.
One of the many plans which have
been suggested as forming a solution
of the serious problem which now con-
fronts the southern cotton men is that
the railroads which are the first to re-
cefve the cotton guarantee the bills of
lading to the American banks which in
turn shall guarantee them to the banks
abroad. With the railroads thus should
ering the original responsibility the
American banks would, 1t is believed
be willing to issue the required guar
antee to the European banks. So far
there has not been the slightest indica-
ton that the railroads will agree to do
any such thing.
In this connection an important con-
ference among leading cotton men will
be held in New Orleans within the next
week or ten days after the conclusion
of the litigation in Alabama.
Those behind the movement express
the hope that J. T. ,Harahan, president
of the Illinois Central railroad, will at
tend the conference and lend his ad-
Vice and counsel in devising a plan
which will fully meet the situation.
Harahan VIII Figure
At the head of one of the most i'm
portant railroads of the Hartman sys-
tenn and one which extends throughout
the length of the Mississippi valley with
affiliated roads traversing the cotton
delta country and extending to ports on
the Atlantic and the Gulf of Mexico
Mr.. Harahan, according to the cotton
men themselves, would form an impor-
tant parsonage at such conference to
be held. Mr. Harahan went to Eng
land when the recent cotton frauds came
to light and attended in Liverpool the
meetings of cotton houses there in the
interest of discussing the system there,
and was refused the courtesies of the
xt,av. .evn n ~ .@@
floor.
Mr.. Harahan may know how to treat
and correct the abuses the English firms
object to In the matter of bills of lading
being forged as 1t affects the railroad
He has expressed the belief that the re-
cent action of the London bankers was
largely due to the differential in prices.
quotations and dilatory tactics in the
campaign of supply and demand from
one another in inaccurate information of
the cotton crops. Members of southern
cotton houses and firms, according to
the British patrons, implicated in frauds
should have been placed in jail. Mem
hers of reputable southern cotton firms
assert importers in Europe have been
warned many times by them against the
frauds which were perpetrated during
the past year. They say the warnings
apparently fell on deaf ears, the same
as false grading OF cotton. They de-
clare British concerns are not more than
exactinR in fortifying their own position
in placing English agents in the south
among the Oldest and expert buyers, and
In addition to American sources can se-
cure concessions for the sake Of econ
omy.
No More Bargain Counters
Many southern cotton men in this city
declare there can be no bargain counter
in the future for staples in the south.
As result of the situation brought
about by European bankers, prominent
cotton interests at Galveston, New Or
leans, Savannah and Mobile, including
other ports. are advocating port bills of
lading, which, they aver with proper
checking systems, will preclude all pos
sibility Of frauds being practiced on Eu-
ropean importers through American
parasites Such q system would prob
ably have the effect Of adding greatly
to the Importance of the ports as spot
cotton centers separated from New York,
and the fact is serving as an incentive
in the large markets Of Memphis. At
liant and Charleston, 1t Is asserted. The
plans would be met with favor in the
south after it had become operative from
merit alone, It Is said. Texas points are
already beginning to report unusually
large receipts Of cotton for this early