The Manning times. [volume] (Manning, Clarendon County, S.C.) 1884-current, 1915-04-07

1made this trip. and l am saying
as much as do now about ac-
ceptances because I feel that we
all need better understanding
of the banking system. The
prosperity of this State depends
largely upon an intelligent use
Of credits arising from cotton.
We reed to learn that the cor
rect idea of a bank is not so much
as a mere place to borrow money,
but that it's highest function is
to conserve the credits G. the
country and use them to the oest
advantage of the entire public.
The time is at hand when We
must better understand what is
meant by reserves. discounts and
acceptances:
All that I have endeavored to
do with the warehouse system
is to transform our cotton into @
basis of credit. I believe that |
have made u beginning in fnan-
cial circles, in establishing the
character of state warehouse re-
ceipts. The state receipt is the
best security that can be offered
on cotton. l Said III December
that it was "up to" the banks.
say so again. There is no eX-
cuse for charging a man with
cotton eight per cent interest IN
South Carolina when money can
be had in New York on accept
ances at four per cent.
I nave the following letter
from responsible note broker
in New York:
"My dear Senator McLaurln:
sReferring to our conversation
in re arrangements for accept
ances against cotton stored un-
der the warehouse system of the
state of South Carolina, I beg to
suggest the following plan for
overcoming the difficulties which
are presented in the tact that
the money that you propose to
borrow would be borrowed for
account of a number these obll-
gors, owners of the cotton hypo-
thecated.
81 suggest that IN order to get
over this difficulty. you arrange
with some responsible bank or
financial institution in South
Carolina to loan against the
warehouse receipts issued by the
State Warehouse System and to
take in connection with said
loans an agreement giving them
the right of rehypothecation or
subr..gation.
''If they are not familiar with
the terms Of this agreement, |
shall be glad to draw it up for
them.
whenever they desire to re.
Iimburse themselves for the ad
vances so made, they can send
the, warehouse receipts to me in
New York together with the
draft at say uinety days sight on
some institution here who is will
ling to accept the same under
J the provisions OF our state law
as set forth in the pamphlet
which, have just handed you.
The usage OF the market is
against making such contracts
as these for a longer period than
ninety days, but it is frequently
arranged thatE the acceptors
shall renew them upon maturity
continuously, making the loan
in fact continuous one.
'For such acceptancas, the IN
stitutions who are willing to
make them, generally charge
commission at the rate of one
per cent per anAum, or at the
rate of one fourth per cent for
each ninety day acceptance.
Drafts so accepted oy any one of
the institutions l have in MUD
can now be sold in the market
here at about 2 l per cent per
annum, which added to the &C
ceptance commission Of one per
cent per aupum and my broker
age of one eight per cent for
each ninety days, equal to one.
half of one per cent per annum;
would make the total cost of the
money so borro we'd fourpe cent
per annum.
"If your local bank loaned the
money at six per cent per an
mum. they could make u profit of