The Birmingham age-herald., 1914-09-04
Would Have Warrant Ware house Receipts Substituted For Paper, Banks Carry
 ing Staple as Collateral
PROPER INSURANCE ANOTHER MATTER OF
 GREAT IMPORTANCE
Situation Will Be One of First Come First Served-Must Have More Adequate Warehouse Facili- ties Than at Present
 Exist, He Says

A1AASt, hAC odyS
 As a method of handling the pres ent situation as regards the cotton crop, W. D. Nesbitt in letter to w W. Ogden, president of the Alabama Merchants association. suggests that cotton notes such as were issued by the Warrant Warehouse company in 1907 be substituted for paper. the cot ton being carried by bankers as col lateral.
 According to Mir. Nesbitts letter such paper could be accepted by state banks as payment of obligations. the banks in turn sending it to their national bank correspondents in exchange for some of their present rediseounts. The national banks can use the paper un- der the ruling of the treasury depart ment for the issuance of currency tc the extent of 75 per cent of the face value of the paper
 Such an arrangement" says MT.
 Nesbitt would go far toward
 clearing the present outstanding
 farmers crop liability and put the
 thc tOtlOu dSSctS Ol HltTCnantS ana
 banks in liquid form. It would only
 be necessary for the merchants
 and state banks of any section of
 Alabama or of the state to say that
 they would accept such notes in
 payment of obligations to them to
 make this circulating and clearing medium immediately current"
 The note issued by the Warrant Warehouse company in 1907 was really a promise to pay the holder of the certificate it's face value on July 15 1908, with s per cent interest from Jan uary 1. 1908. The amount was stamped in the upper left hand corner in red figures and again in the center of the note in red. The note states that it is issued as an advance on cottor stored in the warrant warehouses al the rate of cents pound for mid ding. The cotton thus stored was in sured against loss at $50 a bale The note was countersigned by President Nesbitt of the warehouse company
 MT. Nesbitts letter to President Og- den follows:
 MT. Nesbitt's Letter
 Tn telegram I sent from New York to Mir. Murray Brown concerning the present cotton situation. suggested three things of importance I think we in Alabama should take up these three matters and at once begin to work out their solution.
 q. It is absolutely evident that even if the European war were to continue only 90 days longer n crop of cotton exceeding S,000.000 bales next year VI att1d trjx Ia rrx1.. I1u tt. that which we are now undertaking to carry The fact that acreage was pos sible of being planted to produce greater crops would. in the winter and spring of 1915. nullify our efforts to get a reasonable price for this crop. This situation being true. 1t is evident that the farmer in the south must, in order 10 live. turn his attention to the raising of food crops, cattle and hogs Unless preparation for this change is begun now it will be impossible for our farmers successfully to undertake 1t in 1915 and the result will be an enforced attempt to raise cotton as the only possible means of livelihood left.
 Warehouses Are Necessary
 '2 In order to avail ourselves gener- ally of the help to be extended by the treasury department through the banks to holders of cotton. we must have ware housing facilities much in excess of those now in existence These warehouses can be developed at small cost in all those cotton center where there are responsible bankers now having loans to farmers and on which they look to the cotton for payment. Cotton raised on logs above dry and firm ground, protected from the rain by a roof and from stealage and waste by sides (even of wire fenc- ing) is, when covered by receipts issued by responsible parties, sufficiently se- cure to be accepted as good collateral. Such warehouses can, by the cooperation of the different communities, be estab- lished and receipts Issued either by an association of locally responsible people or by an arrangement with warehouses such as the Warrant Warehouse con- pany here which lease such premises and have a local custodian to issue theft reg ular receipts for cotton stored
 'The third problem is that of insur- ance and this Is most important On account of the. fact that foreign insur- ance companies which heretofore have carried large lines of American risks are much impaired by the European war situation, they are largely removed from competition with the insurance companies of this country and in addition the lnsur- ance companies here have not these com panies to reinsure over lines which might be Of1ered to the American com panies The result of this situation, I am sure will tend to an increase in in- surance rates and to a difficulty in se- curing as much good insurance as may be needed to cover the cotton that 1t will be necessary for the south to carry. The insurance situation is going to be one of first come first served and unless Alabamians energetically and intelligent ly take up immediately these questions we may find that we are not able to avail ourselves of that proportion of f. nancial help to which we would other wise be entitled. I suggested in the tele- gram to Mir Brown that a committee on this financing warehousing and insur- ance proposition be appointed from your association to gather information and data and make suggestions to the com munities throughout this state. am sure you will find active cooperation on the part of our banks and business peo- pie in the financial centers of the state and if there is any service that either I or this company can extend we shall be more than glad to do so
 Cotton Mote Sugeested
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