The Birmingham age-herald., 1915-02-28
EVENTS HAVE SHOWN
 COTTON IMPORTANT
 AS BIG TRADE FACTOR
UContinued from Page One)

that Immediately followed the beginning
 of hostilities destroyed the market for
 cotton and reduced the demand for it to
 the daily needs of such mills as ac-
 tually required 1t to supply their spin
 oles. Every purchaser, actual and po-
 tontial, was overwhelmed with offerings.
 and while the prices asked were admit
 ted to be far below intrinsic values and
 cost of production, it was found by buy
 CTS that purchases on a given day were
 followed on the next by offerings at lower figures. Each mill owner was
 afraid to buy freely, even where he was
 able to finance himself, lest his com pttitor could by holding off secure his supply of cotton on a much lower ba-
 sig. Not only were the merchants and bankers of the cotton growing sections embarrassed by the inability of the farm CTS to convert their product into money, 1 but the transportation lines, accustomed st that season to the heavy tonnage created by the movement of cotton to market, suffered so serious a loss of business and so great reduction in earn ilgs that they were forced to adop. drastic economies, such as annulment of trains and abandonment of improve
 ments and repairs. with consequent stop page of purchases of supplies. This neces- sary action threw much of their own labor out of employment, besides de- | rnoralizlng the market for coal, iron and steel products. and lumber. The entire suspension or curtailment of operations on the part of coal mines. furnaces, steel plants and sawmills greatly aifg-
 me nted the ranks of the unemployed and aggravated the general distress. Obliga- tions to fertilizer companies, to jobbers and to banks both in the south and north were maturing, and bankruptcy St eemed eminent throughout the cotton sections, although nature had been most bountiful and had rewarded the toll of the tillers of the soil with the largest crop ever produced. Exports fell to less than one-tenth of normal and foreign countries mostly belligerents. that held ma turing obligations of American mer- chants and bankers for large sums. az gregatlng probably more than s400, GOO GOO were calling for settlement. Our gold re- serves were threatened, and the ex tremely sluggish movement of a great commodity that had been counted upon tc produce 5000 0,000 of foreign exchanges affected the finances of the world. The greatest financial leaders in this country were at a loss to find a remedy, all though expedients of ao sorts were pro- posed, among them the "buy bale" plan which resulted in the sale of a limited mount of cotton at $50 per bale by compara lively small number of producers, which merely shifted the ownership of the cotton involved without increasing it's consumption adding to it's market price, and which also tended to give hold- CTS wrong ideas as to actual values. Va ricus other schemes were agitated look ing to the purchase of cotton at fixed price by the national government or by the states. but no legislative action re- suited except the enactment of an ex-
 cellent warehouse law in the state of South Carolina.
 F. J. Wade's Plan
 The city of St. Louis the commercial
 gateway to the southwest. and a great
 distributing center for the entire south,
 was perhaps more directly affected by the
 distress prevailing throughout the cot
 ton states than any other financial cen
 tel. and to a banker of that city. Mir.
 Tostus J. Wade. is. due the credit for
 the initiation of a relief measure whose
 evolution into 8 great cotton loan fund
 was undoubtedly Instrumental in end-
 ing the cotton panic. Out of total
 sum of s1O1 ,035.1 100, subscribed by and
 through the banks in the north, east
 end west, New York subscribed $53, 600 O00;
 Chicago, sl2,O45.5 500; St. Louis s12, GOA, 600;
 Philadelphia, $5,170000; Baltimore, g. 45l,-
 0O; Boston. $2.085,000 Cincinnati $200O,-
 GOO: Cleveland. $2,000.o0; Pittsburg. $200o,-
 eco, and several other cities more than
 $, ,Oo0,Oo0 each. Altogether there were 6sa
 subscribers in GA cities situated in 19
 states and the District of Columbia
 While the funds provided were barely
 touched, the total loans having been
 only s2S 000, the plan was nevertheless ef-
 fective in creating the mental attitude
 necessary as a foundation for the restora-
 ton of orderly methods and normal con
 ditions yet while the fund was being
 subscribed much opposition was mani
 fested and the idea condemned in some quarters as illegal, economically unsound,
 dangerous and visionary. The essential
 C.. <,t,ra ne ha ,laV, n6 foA 1aotr-a IT
 was cooperation between banks in rne
 SC uth, who. rue. aIreiidy had Il
 large equity in the cotton crop by vir-
 tue of advances made while it was be-
 i.,g grown, and banks in other sections
 whose interests were remote and whose
 participation was due to patriotic public
 spirit. The m/ /nbers of the federal re-
 serve board. fin their individual capaci- ties. consented to act as central com rlittee in general charge of the manage nient of the fund loan committee WAS appointed, composed of two members of the federal reserve board and of six
 well known bankers representing the
 cash subscribers. The south was to sub
 scribe as needed a total of $35, ,0OOO O00, and
 southern banks were allowed to pay their
 subscriptions in notes secured by cot-
 ten collateral, and loan committees were
 appointed in each of the cotton growing
 states, who, in turn, selected a large
 number of local committees throughout
 their respective states. The plan provided.
 in effect, for a moderate valorization of