Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1914-01-23

talked to bankers in New York and
Boston and they are ready to take our
warehouse receipts.
The state is not to loan money, 1t
is not to buy cotton, 1t does not guar
antee any debt, it merely provides a
warehouse, grades the cotton. weighs
1t and says, Il will deliver that cot
tom to whosoever presents the receipt,
and I will deliver the identical bales
numbered on the receipt"
Is not Revolutionary.
have never discussed the business
system to which the warehouse bill
will be an adjunct. Some people seem
to suppose that it is intended to put
cotton buyers out Of business and by
some miraculous dispensation obtain
more than cotton. is worth by over
turning the laws Of supply and de-
mand. This Is not true. 1t Is only in
tended to insure the producer at all
times getting the full value Of his cot
ton. 1t will put gamblers out Of busi-
ness because it will give stable price,
but it will enable the legitimate cot
ton buyer, to do safer business than
under the present system, dominated
by little coterie in New York who
run the market up and down by ma
nipulatfng a small stock Of dog taiP'
cotton.
I said last winter that we could al
ways borrow 80 per cent Of the mar
ket value of the cotton on our ware
house receipts. I am prepared to go
further than that since the passage of
the currency bill. If congress goes on
now and passes an anti-option bill
forcing the future delivery Of cotton
contracted for in the state Of its pro-
duction. Here is how I figure 1t out
that the cotton business will be con-
Quoted.
There will undoubtedly be larger
cotton firms organized in this state
than we have ever seen before. It Is
impossible to handle the cotton crop
without some place where the hedge
sales can be made. The legitimate
hedging" demand. that Is the actual
demand for the future delivery OF cot
ton, a most important factor, can, II
properly handled or "syndicated" be
made the basis for the creation Of do
mestic and foreign bills Of exchange
which any reserve bank will discount
or buy at par, that is actual invoice
value, provided that the originators
of the paper are responsible parties
and that the collateral (cotton) is Of
guaranteed commercial standard
and surely deliverable on the con-
tract.
The floating demand is estimated
at an average Of about two million
bales; when it runs in excess Of this
cotton will seek the warehouses, and
maintain the price, when 1t falls un-
der 1t (cotton) will come out Of the
warehouse on account Of rise In
price. At present great cotton au-
thority says this floating supply is
'polarized' in the market. This is an
explanation Of those long time" con-
tracts reaching into the crop Of 1917.
New Currency Bill.
If cotton Is handled all over the
south as I have suggested, 1t will
not take so much warehouse room
for it is patent fact, that production
is not keeping pace with consumption
and the demand except for a few
months in the fall is sufficient to abb
sorb at all times the average amount
Of visible supply.
The new reserve banking system
will furnish the money for this bust
ness, but it cannot do so indiscrimi
nately; it must exercise all the care
and scrutiny demanded by the pru.
dent and conservative conduct Of tho
banking business. The basis for these
transactions must be absolutely SCUM
and without the least cause for objec-
tions.
l. The title to the cotton must be
beyond question.
II. The basis Of the collateral (cot-
tom must be graded, properly ware
housed and insured.
III. The cotton contracted for (not
other cotton) must be delivered upol
call.
Banks cannot do business without
these safeguards, and we all know how
commercial papers, bogus bills Of lad
ing and substitution Of cotton, have
crept in and rendered it difficult to han
die warehouse receipts except in the
locality where the managers Of the
warehouse are known.
This system is bound to call into
being strong private tradine compa-
nies, which with this paper would
create good foreign and domestic ex'
change. 7 would like to see one OF
these reserve banks in Columbia, but
it matters very little to this plan
where it is located. The affiliations Of
our banks with other reserve centers
would be quite sufficient for the pur'
pose of facilitating tho carrying OF
cotton. All the banks in the south ant
the east are familiar with cotton, and
would be glad to re-discount or buy
this exchange, and therefore instead
of being a strain on the reserves ir
South Carolina, the proceeds OF the
sale Of this exchange would bring ir
additional funds. Part Of the exchange
would naturally be domiciled in Eu-
rope where most Of our crop is sold
this would mean that the supplies ir
our warehouses destined for ultimate
expectation, would in the meantime be
carried by European capital. Thinl
what that would mean to our banks
here, and the abundant capital anc
credit our cotton crop would furnish
for the development Of our natural re-
sources, and the enrichment Of oul
| own section.
Now, senators, contrast this will
the present method, which must con
tinue unless this bill becomes a law
| for have never heard Of another plaI
which even promises to put the cottor
business on the sound basis OF justice
and common sense. You have now
market in which it is possible to po'
larize" a large part Of the demand ane
give 1t the effect Of actual supplies, 81
| that the gamblers NAV have theil