The Birmingham age-herald., 1914-09-30

same time the low price Is inducing American cotton manufacturers to make heavy purchases or to contemplate doing that, for they are persuaded that Tor year or more the United States must de- bend on them for domestic cotton manu- factured goods, and, ln addition, there may open a considerable market for these goods in South America and elsewhere.
 Time a Strong Factor
 Unlike lo.u pfouuv.s when are bought for immediate consumption, cotton can wat for d favorable market provided cnly facilities Tor carrying It can be obtained. As the cotton harvest IS estimated to be CT the money value, lncludlns Dy-prod- ucts of considerably over sLooo,VUVUVJ, and as the marketing of cotton is essen tlai to the prosperity of the south and to It's immediate buslness aoyantase, the proplem winch finance must consider IS now this harvest can be protected and cared for so that time may be gained while at the same time planters are re- lieved from pressing emparrassments. More and more opinion concentrates upon the warehousing of cotton and the util- ization of additional currency for financ- ing this warehousing. The state of Texas, which is attracting more and more atten- ton in large financial centers because there seems now to be in that state q good understanding of modern economic questions and d desire to place the state in line of sound economic policy. has already set an example which other states of the south may follow. The state has established an excellent cotton warehous- ing system. The warehouse receipts or certificates can be negotiated under au- thority of the state to the extent of 75 per cent of the agreed-upon market value of the cotton. If, then, the banks of Texas take out additional currency under the emergency currency act, funds can easily be provided whereby the cotton harvest of Texas can be protected until normal market conditions are restored.
 Among other valuable services per- formed by the Secretary of the Treas ury, MT. McAdoo, at this time has been his decision to accept notes secured by cotton warehouse receipts as basis for the issue of an additional currency. Of course, this method will accomplish no more than perfecting facilities for main- taining the usual movement of trade along lines which are influenced by the cotton crop. It is as much an emergency meas ure as is the issuing of additional cur rency or the formation of the national bank gold pool. While there has heen some sentimental interest behind the ap- peal contained in the words, Buy bale of cotton," nevertheless it is recognized here that the plan cannot commend itself strongly to those who are seeking means by which the cotton harvest prob- lem can be solved.
 There is some reference in the financial center to another proposition which is in the nature of actual barter. If 1t should be adopted, then merchants and others would accept warehouse receipts or the cotton itself at current prices in settle ment of indebtedness. The plan, if it meets with favor, will, it is thought, fairly well supplement the more impor tant proposition, namely-the warehous- ing of cotton and the discounting notes by the banks by means of additional or emergency currency, up to 70 per cent of the current prices of cotton.
 A Problem for the South
 Just at this time the men of finance and the leading bankers in the large financial centers are almost exclusively occupied with the liquidation of such of our foreign indebtedness as is represented by New York city notes and by conner cial obligations. They do feel that the cotton problem Is one primarily for the banks and men of capital in the south to work out. With the assistance which the federal treasury is ready to give by accepting cotton warehouse receipts as security for emergency currency and with a disposition on the part of merchants to accept either the cotton the receipts in payment of debts, the south should with little patience work out this prob lem. By and by, when the financing of New York city's debts and the national trade obligations has been accomplished, the bankers of large financial centers will be able to lend aid to the banks of the south if that be necessary. There seems to be a growing opinion that the opening of the New York stock exchange and other securities markets will be facili- tated by the convenient disposition of the cotton situation.