Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1915-08-27
aMiseellaneous Readins.
IN DEFENSE OF COTTON
w. G. p. Harding Thinks Situation
Hopeful.

G. Harding, Of the Federal reserve
board, told the Alabama Merchants
association here that the placing of
cotton on the contraband list by the
Allies did not create a desperate sit
uation but rather one calling for intel
ligent leadership. He urged southern
bankers to make concessions to finance
the crop and predicted there would be
international competition for the
American crop, despite the fact that 1t
was %contraband. Mr.. Harding handled,
for the reserve board, the arrangements
for the hundred million dollar cotton
loan fund. He explained to the Ala
bama merchants, however, that he was
not speaking for the Federal board,
but was giving his personal views.
Germany" said Mr.. Harding, rs as
anxious to have cotton as the Allies
are to prevent her. 1t is not incon-
ceivable that there may be evidences
before very long Of international COM
petition for possession Of the south's
great staple. 1t is at least a possibili-
ty that cotton will be purchased in
large quantities for foreign account and
stored in southern warehouses, to be
shipped out as needed and as oppor-
tunities for shipment arise.
mo one has ever accused the Ger
mans Of being lacking in far-sighted-
ness. They are already looking for
ward to what will happen when peace
is restored and that they will make a
supreme effort to recover their lost
trade with other nations cannot be
doubted. 1t is reasonable to believe
that they would look with complacency
upon the absolute control Of the cotton
market by the mills Of England and
America, permitting them to secure
their supplies of cotton at very low
prices and defer their w purchases
until after peace is made and take the
chances Of securing then their own
stocks at much higher prices? Is it
not reasonable to believe that they will
arrange to buy cotton as the spinners
of other nations buy it and can they
not easily arrange to have their cotton
purchases stored in this country for
their account until they a transport
it to their own shores?"
Mr.. Harding said the south's welfare
depends upon the marketing Of cotton
at fairly remunerative rates and south
ern bankers should, wherever possible,
make liberal concessions in their usual
rates on commodity loans. High in
~terest, he pointed out, means forced
sales.
present conditions" he said, fully
justify low rates and southern bank
ers should be willing to forego tempo
rary profits for the sake Of security
and solidity in the future. I am sure
that the Federal reserve banks may be
depended upon under their power Of
redicounting to cooperate to the
fullest extent with the banks in TAX
ing care Of the cotton crop and this
assurance is, of course, not confined to
cotton loans but extends to other staple
commodities.
1T is now a matter of public know
ledge that the British government and
its Allies have declared cotton an abb
solute contraband. By that 1t Is UNDER
stood that cotton will be subject to
seizure, even when consigned to neutral
countries, unless the shipment is made
in accordance with the terms and limi-
tations Of the proclamation declaring
it c~ontraband. AS the annual takings
of American cotton by Austria and
Germany amount to about 5000, 900
bales, the attitude Of Great Britain and
her Allies has created much uncertain
ty in the cotton trade and great ap-
prehension On the part Of cotton pro-
ducers in the south"
MI. Harding assumed that %, $780,
900 bales represent the worlds normal
consumption. The visible supply now,
he said, was 4,250,0OO bales and an
estimate of 100000 bales for the
present American crop could not be re-
garded as too low. He took 5000, 900
bales as a fair estimate for all other
countries. His estimate for the next
II months, including what Is now in
sight, thus totalled q $500, 900 bales.
The declaration Of contraband against
cotton, he thought, would perhaps be
more effective in keeping it out of Ger
many than were the orders in council.
If the worlds cotton requirements by
reason Of the val were curtailed g.
000, 900 bales for the coming season, he
pointed out that would represent the
amount that would usually go to Ger
many.
The Federal reserve board, he said,
has been advised by the department Of
agriculture's office Of markets that the
public, private and cotton mill ware
houses in the cotton growing states in
1914 had an aggregate storage capacity
of II, 577,465 bales.
1T is thought not at all unlikely"
he said, that before the present crop
m to market there will be 5000
warehouses of all classes in the south.
Should this prove true, there will be
storage capacity in the southern ware
houses for not less than $500, 900
bales Of fiat cotton, while the cotton
mill warehouses will be able to take
care Of 1900, 900 bales. Concensus of
opinion of representatives of the Fed
eral reserve banks Of st. Louis, Rich
mond, Dallas, Atlanta and Kansas City,
consulted by counsel for the Federal
reserve board, seems to be hat the
holder Of negotiable warehouse receipts
is protected from all claims Of subse-
quent lien holders and subsequent
creditors the original owner of the
commodity covered by the receipt.
I'm view of difficulties that NAV
arise in satisfying distant lenders as
to the validity under all conditions of
warehouse receipts for cotton offered
them as collateral, it would seem that
for the present, at least, loans on cot
ton must be first negotiated through
local banks in the south. These banks
have now ample facilities which they
have never before enjoyed for redis-
counting the notes taken against such