The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-01-25
tary Of the Treasury the cotton loan

tary Of the Treasury the cotton loan
pool would never have been formed.
The original suggestion for the prof.
ect came from some Mississippi Valley
bankers, but it was promptly confiscated
by Mr.. MCADoo for reasons best known
to himself possibly in pursuance of
his policy Of manifestng the extreme
sensitivcncss of the Administration to
any political uproar in the South. I'm
der his direction the project was ma
terially altered until its original in
vcntors were ready to disown IT, and
through his insistcnce the loan fund
was created by subscriptions drngooncd
from the banking community of the
country.
Banking support was given to the
McAdoo cotton pool on account of Wash
ington and not on account of the real
necessities of the cotton situation. 1t
did not express banking Judgment that
the pool was practical or required from
business standpoint II represented,
so far as bankers were concerned, a
somewhat compulsory concession to the
political considerations which were As
sumed to he influencing the Treasury,
but it is doubtful If the subscribers be-
tor in the restoration and recovery IF
the cotton market.
Speaking generally, the plan was al
ways cumbersome If not absolutely un-
workable. Speaking specifically, 1t was
uneconomic in that ii aimed to use
private credit under governmental aus.
pieces To help establish the basis of
prices for a staple commodity. whereas
prices customarily provide a large part
of the basis of credit Moreover. even
while the cotton pool was in process "
completion IT was being rendered su.
perhuous by developments.
II was predicted AT the time that
with the reopening Of the cotton rN-
changes an ample supply of credits FOR
cotton would Ice provided in the Gus
tomary fashion, and the explanation
of the failure Of the cotton pool is that
the restoration Of normal market ia
cllities has led to movement Of Cotton
I
consumer. To financing this movement
the inauguration of the Federal Reserve
| banking system has contributed, hut
this also was foreSecn when Mr.. Nc
| ADoo was rounding up banking sub
scriptions for the pool.
! 1t is not to the point to review all
| the remarkable circumstances Of tn :
| episode in Treasury history. 1t suf.
/ fees to say that 1t denoted yielding by
/ the Administration to just such Il
pressure of what appears to be neccS-
sity' as President WILSON deprecated
! in his admirable little speech to the
/ delegation Of the cotton growers who
! her to urge direct Government loans
on cotton. The McAdoo cotton pool
was the Administration compromi 80
| in this matter. and the fact that ii Is
now seen to have been uncalled for
only empha sizes 1t as just such an I'M
wise departure from sound economic
principle and practice as the President
had told the cotton growers should he
avoided.
To-day an apparent necessity for the
hasIy eXtemporzation of an American
merchant marine is asserted as an ar
gument for setting up the Government
IN the shipping trade. Precisely as Ia
the case o: the cattcn pool, tho wh"l"
Administration argument is one Of aI'
parent necessity. Yet precisely aS n
the ease of the cotton pool the weight
of economic evidence and business eN.
perlence Is overwhelmingly against The
experiment