The herald and news. [volume] (Newberry S.C.) 1903-1937, 1915-07-09
UNITED STATES SHOULD
BRING ENGLAND TO TERMS
That Is the Key to the SituatiOn-HOke
Smith Says British Have Played
Havoc With Cotton Trade.

TIE Augusta Chronicle OF last Sun
day publishes the following exclusive
interview with Senator Hoke Smith,
OF Georgia:
The public mind was Justly filled
with horror at the sinking OF the Lu-
sitania. But We should not for this
reason forget that Great Britain and
her allies nave utterly disregarded the
rights of American citizens, have
placed heavy burden upon the legiti-
mate commerce of this country, and
have injuriously curtailed cotton mar
kets.
Just before the war began m1dqling
cotton was selling at IS IL cents a
pond. We normally sell abroad two
thirds of our cotton crop, For a while
our entire foreign market was cut off.
Our domestic market was seriously i'm
paired by the disorganized condition
OF our finances.
Too much praise can not be given
the administration for tie manner in
which our currency laws were amend
ed and threatened liquidation prevent
ed. Now the reserve banks are in a
position where they can issue, if ne
cessary, from $7,000,000 to 800,000,O00
of reserve notes fully secured, and
our domestic market for cotton is re-
moved from strain.
Last fall exports were hampered by
the enormous insurance rates On trans
oceanic shipments The war insurance
bureau established in the treasury de-
partment reduced war insurance rates,
which were ranging from 20 to 80 per
cent, down to 2 and per cenc.
Why the Price of Cotton Went Down
to Six Cents
Still, during the latter part OF 0cto-
Der the price of cotton did not rise.
The markets of Germany, Austria and
northern Europe consume over S,00O,-
900 bales of cotton annually. This
market remained closed. Buyers of
cotton thought it would continue closed
and the lessened demand, coupled with
the threatened surplus, carried cotton
down to 6 cents a pound, with a linn
ited market even at that price.
Shipments of cotton to Germany,
Austria and northern Europe were
prevented by the constantly circulated
reports that Great Britain intended to
put cotton on the contraband list, and
seize vessels carrying cotton.
October 23d the acting secretary of
state, at the instance of committee
of senators, conferred with. the British
ambassador, and urged the British
government to give definite state
ment with reference to cotton ship
ments. October 26th the British am
bassador presented to the state de-
partment letter which contained the
following language.
"Last night I received a reply from
Sir Edward Grey in WI ich he author
ICES me to give the assurance that
cotton will not be seized. He points
out that cotton has not been put in
any of our lists of contraband. It is,
therefore, so far as Great Britain is
concerned, in the free list, and will
remain there
Why Cotton Jumped From Six to
Ten Cents.
The communication of this assur-
ance from Great Britain made it prac-
ticable for cotton merchants to secure
vessels and to finance shipments of
cotton to Germany, Austria, and TO
northern Europe. This market was
thus opened. Cotton buyers realized
the broadening market for cotton.
During the months Of December, jan
uary and February large quantities OF
cotton were shipped abroad, and the
price rose frcm 6 cents a pound to
10 cents pound During March mid
ding cotton sold up to so 1-2 cents q
pound.
Thus we nave clear illustration Of
how the closed market depressed the
price, and now the opened and broad
ened market increased the price at
which cotton sold.
what @Orders in Council" Did to Cotton
On the frst of March came the no
tice from Great Britain that the Brit
ish and French governments will hold
themselves free to detain and take in
to port ships carrying goods Of pre-
sumed enemy destination, ownership,
or origin This was followed by the
order in council Of March 18th, but
prior to that order the state depart