The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1914-09-15
FAVORS STATE BOND ISSUE
Says That if the Leading Cot
ton Growing States Would
Enter Into Plan Proposed by
Senior Senator Value of Cot
ton Would Not Fall Below
Ten Cents

To the EditOr:-We are all agreed
that a great emergency has arisen in
the marketing Of cotton. The war
has deprived Us of our export markets
which take sixty per cent Of our cot
ton. There is no use in the talk that
the law Of supply and demand will
have to be allowed to work out it's
effect. Sixty per cent of our con-
bumers have not been killed. Eng
land, France, Russia, and Japan will
quickly prove their mastery Of the
sea. So commerce will soon be free
between the United States and these
countries. Absorption in war will
temporarily take a large number
away from the textile industry in
foreign countries. But modern ma
chinery which make large scale
slaughter and destruction of property
possible is going to bring the war to
4 speedy close. Thus the usual de-
mand interrupted by the war will be
effective again with a slight decrease
in the number of n a
large decrease In their purchasing
power.
The question is who is to hold this
cotton until the demand bee mes
again effective, especially for this
sixty per cent that usually goes
abroad. II the cotton which goes into
export Grade is thrown upon do
mestic Narket, prices OF cotton will
be cut down to half. Our own mills
will delay purchase Of their supply as
long as prices continue to fall. This
will cause a still further decline. This
will mean the loss of millions of dol
lars to the South.
Wall Stree On the Alert.
The loss of the South will lc the
gain Of Northern %financiers. Wall
Street Is not dead to this great OPP
portunity. 1t is crying imitation at the
first suggestion Of admitting our
warehouse receipts as a security for
note issue. The banks of this State
are being charged six per cent for
loans by New York bankers, and are
finding 1t difficult to secure credit at
that rate. Banks Of this State will
have to charge more than six per cent
or do business at q loss of running
expenses n profits. If our farmers,
mills and merchants are charged six
per cent or more 1t is easy to see that
they cannot compete with Northern
spectators In holding thc present
crop when the latter car secure credit
for from four to six per cent.
Now let us consider the adequacy
Of the plans which have been pro-
posed to help the PRODUCER hold the
crop until 1t can be marketed advan-
~tgeously. The Secretary Of the
Treasury. McAdoo, has finally agreed
to recognize cotton warehouse re-
ceipts as a security for note issue tc
the national banks. This he says
will insure . sufficiency of credit fol
the Southern cotton planter. But the
banks Of this State are for lie mos
part not national banks. We have
only s~eventy-two national banks d:
compared to AIS State banks.
The Problem Stated.
To see our problem. let us take tn,
~
producing counties, those which ha
a production Of 90, 600 or more bale;
in 1913. The cotton produced il
1913 was 1895 bales for the Stat,
and the expectation for this year i
Is per cent higher for the State thar
last year. So this alone will make al
our figures low. Let us assume
value Of fifty dollars "A bale, the fgur
which is at present taken rs a prope
basis for calculating the value of cot
ton under present conditions. TIL
value Of the 1918 crop Of $3.50
bales Of these ten counties wou,' b
316,440,4 400. tSee table %. The capi
tai and surplus in the national bank
in these counties is $3,325, 600. Thes
banks will be allowed a total not
issue OF $4,156.25O oil 1925 per Ger
Of their capital and surplus. If a.:
take from this total possible note is
u the noUn of notes already i
circulation we have an additional not
Issue OF S1.925, 500. (See table -.
According to the estimates tn
bankers Of these counties > amour
advanced by the merchants on til
growing cotton crop woul rams
from SO per cent in Wayne &c 80 pe
cent in Halifax. (See column
table D. The amount Of oar capt.;
required to meet this kind Of oblig;
ton alone would be $10,763.523 {
about two and a half times as muC
as the amount of the total note is,
and i've times as much as the amour
Of the additional note issue. Wv