Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1914-11-03
The Bond Issue Proposition.

the law may be repealed
The Bond Issue Proposition.
One Of the most important matters
considered by the extraordinary ses-
sion of the general assembly was the
proposition to issue $24, 900 600 worth
of per cent bonds, to be used in
helping the cotton producers of the
state out of the exceedingly uncom-
Portable position in which they have
been placed by reason Of the failure
of the European markets.
Because of the confusing onslaughts
against this proposition by the daily
press and the strong opposition in
the general assembly. it was doubtful
from the beginning as to whether 1t
could ever attain the force of law and
it was reasonably certain that If the
question was finally submitted to the
people they could not be expected to
act intelligently upon it, for the rea-
son that they would not have the nee
essary information.
1t is a fact that when the general
assembly was first convened in extra
ordinary session, very few Of the men,
bers had any idea Of what could be
done to relieve the situation, and many
of them were of opinion that nothing
could be done. Others had no opin-
ions at all, and the bond issue propo-
sition was finally taken up as about
the most practicable expedient in
sight.
1t is probably a fact that those
who saw most clearly the benefits that
might accrue from the issuing and
successful administration of the bonds,
also best understood the difficulty of
making the bonds available and of
securing a successful administration
Of them even if they should be made
available. ..s'
Among the confusing arguments or
rather declarations put up against
the proposed bond issue was: l. That
it was very probable that these bonds
would have to be sold for so cents on
the dollar. 2. Even if sold at 100
cents the money could not become
available until the cotton had gone
out of the hands of the small farm
ers, and the poor man" would get
no benefit. 3. To make cotton worth
9 cents when it could be bought on the
market at only 81 cents, would stimu-
late overproduction next year. 4.
That the bonds would be taken at so
cents on the dollar to pay their taxes
at 100 cents and for speculative pur-
poses. 5. That the whole thing would
result in the creation Of a tremendous
debt that would rest as a burden on
the state for generation. 6. That
such tremendous issue of bonds
would destroy the credit of the state.
That bond brokers would be able to
skin the state out of thousands.
AS to the general soundness of the
bond idea or its merits we have never
had great deal Of doubt; but we have
had a feeling all the while that it
thirds Of the people to vote for it. This
feeling was based upon the belief that
about one twentieth Of the people who
understand the whole subject best, and
who for various reasons, most of them
selfish. did not want a bond issue, and
would be able to confuse the people
sufficiently to make them follow that
pretty good old rule which runs:
when in doubt, do nothing"
If our people, however, were a unit
on the question Of trying to help the
cotton producer out of his serious pre-
dicament, we do not know Of better
way open to the state under the cir
cumstances than through this very
bond issue proposition.
The fundamental idea was to lend
the cotton producer the credit of the
state to sufficient extent to enable
him to hold his cotton until the mar
ket advanced to a point that would
enable him to sell at a fair profit.
To accomplish this end it was the
purpose Of the law to advance the
farmer bonds at par in exchange for
his note, with his cotton as security.
1t was provided that at the time of the
transaction the farmer was to pay the
state about one cent pound, covering
interest and warehouse charges that
would make the state safe for about
two years. The farmer would thus
borrow about two cents a pound more
than his cotton was really worth on
the market, and be able to make that
amount Immediately available. The
state would for the time being have a
shortage Of two cents a pound in the
value Of its security; but ii would also
have the advantage Of two years of
time. Now II cannot be stated as
fact that cotton will go to IL cents a
pound within the next two years; but
with the law holding our own farmers
down to reduced production, and pow
erty and prudence holding the farmers
of the other states down, it is not i'm
probable that the II cents mark would
be reached in 1916. Then assuming
been loaned on a 8 cents basis, If there
should be an advance to IL cents by
1916, the states security would be
worth around 100000, 900, and when
that security was sold not only would
the state be repaid in full for all it had
advanced, and the bonds retired with
the money; but there would be profit
of $6,000,000 to be divided among the
people who had put up their money.
But OF course we nave not forgotten
that whether the bonds were good or
bad, they would be subjected to long
drawn out litigation, and while this
litigation was in progress, it would
weigh down on the bonds that the
farmers had been given for their cotton
and probably force them far below par.
In this way many of the farmers could
easily be ruined, though later on the
security they had put up might be
worth much more than the bond they
had received and been forced to part
with at much less than value.
However, as we understand it the
whole question is now purely academic
and about the only practical reason
for its further discussion is the educa-
tiOnal value that might accrue to the
people.