New-York tribune., 1910-08-23
GUARANTEE COTTON BILLS
American Express CompanyStirs
Un Banking Concerns.
NEW PHASE OF SITUATION
Denies That It Is A1tagonizing
Bankers, but a Fight Is
Imminent.

Bankers here were much interested yes
terday in cable dispatch from London
that the American Express Company.
which is q large buyer Of bills Of lading
for export cotton, had addressed circu-
lar letter to the English bankers express
ing its willingness te guarantee the genu-
ineness Of all cotton bills purchased by 1t
snd sold TO bankers abroad
Discussion Of methods OF safeguarding
bills Of Iadsng for cotton that would prove
acceptable TO foreign bankers has been 60
ing on in banking and railroad circles
here for several months. Recently z COM
Easittee composed of representatives Of the
leading banks here which deal in these
bills adopted a plan for safeguarding them
through the issuance Of what were TO be
known as "validation certificates by the
railroads.
Most CT the railroads transporting cotton
agreed 70 issue such certificates. which. in
brief. were TO consist Of documents per-
razne-tIy attached 70 the bill Of iading
certifying that the agent issuing the lat
te- was an authorized agent Of the rail
road company and that the number Of
bales Of cotton marked on the bill of lad
i.sz vas actually received by the agent
Il was thought that this plan would
meet the requirements Of the foreign
i,ankers, but a committee Of the latter ap-
pointed 20 consider the matter recently
edo0ted & resolution insisting upon the
banks here guaranteeing the gsnuineness
Of cotton bills purchased by them. Such
g guarantee the national and state banks
are unable 10 give. as they would be lend
ing their credit" in violation of the law,
and the request Of the English bankers. #
insisted upon. threatened greatly TO ham
pe- Z not entirely prevent shipments OF
cotton abroad this fall
For this reason q committee CT bankers
= about 10 go 10 London TO see If they
cannot get the bankers there TO give UP
their idea of bank guarantee and con-
sent 10 the valuation certificate plan
The action Of the American Express
saupany, however. il Offering 10 give
guarantee puts 2 new phase upon the
matter and threatens, If accepted by the
foreign bankers. 70 eliminate the national
and state banks here from the business in
cotton bills. That they would not give
I'D this business without fight was indi-
Gated ty the remarks made II banking
circles in Wall Street yesterday.
representative Of the American Ex-
rress Company said that the company had
not committed itself TO giving a guaran-
Tee. bur had merely written 70 the for
eign bankers for information as TO just
what kind Of guarantee they wanted and
-lClOsIng & copy of q guarantee that the
express company was willing TO give. IF
E Tlais guarantee proved satisfactory 70 the
banks abroad. he said. the company would
then consider whether or not to give the
guarantee, but that nothing would be done
that would antagOnize the bankers here
such E guarantee, he added would only
be attached 10 bills Of lading that had
been il turn guaranteed by the bankers
from whom they had been purchased In
this connection he said that all the pri-
vate bankers and trust companies in the
South from whom the express company
purchased its cotton bills already had
agreed 10 guarantee them
The form OF guarantee which the ex-
rTBss company has signified its willingness
e make TO the foreign bankers is as fol-
Iows;
COTTON SHIPMENT GUARANTEE
We. the American Express Company.
hereby guarantee that tbs attached Bill
Cf Jadiug, issued by -, No. - dated
- place OF issue1, - fdate1. covering
- Bales Of Cotton, marked -, is genu-
tne IN every respect, and bears the sigma
tUre OF the duly authorized Agent of the
said Railroad Company.