Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1915-09-03

OF such powerful aid as they are as
sured by the Federal administration
will be rendered them.
New York, in company with several
| South Carolina bankers. I find that
the banks there with southern corre-
spondents are ready to extend credits
based on state warehouse receipts
outside Of the usual line for the cur
rent needs of the banks. l suggest
that our local banks, in handling their
customers notes secured by warehouse
] receipts do so by rediscount, and where
that Is not practical, and it is neces-
sary for the banks to give their own
notes, secured by farmers notes and
receipts for cotton, which increases the
local banks liability on bills payable
that the entry Of such liability be de-
signated on the book Of the bank, and
in the published statements, as bills
payable secured by South Carolina
state warehouse receipts" By doing
this, the northern banks will readily
understand what the abnormal amount
Of bills payable represents, whereas
II they did not they would be re-
luctant to handle the notes Of the bank.
There are several large banks which
have expressed their willingness to
handle state warehouse receipts for
others than their regular correspond
ents. These banks, however, do not
care for this class Of business in
small amounts, say, less than ten
thousand dollars.
None Of the banks with whom I
talked in New York were willing to
commit themselves as to the rate of
interest In advance Of an application
for a loan. I gained the impression
that they did not like the authorities
in Washington undertaking to fix the
rate Of interest, but felt that in every
case 1t should be done by the banks
interested, with the facts regarding
each particular loan before them. I
am satisfied that it Is going to require
firm and determined stand on the
part Of the Federal administration to
hold the rates Of interest down. For
certain reasons 1 prefer at present not
to have much to say on this point, but
will await developments.
There is plenty Of money to finance
this crop and force fair price to the
producer. Our policy Is to warehouse
our cotton and get a receipt complying
in every Particular with the require
ments Of the Federal reserve board.
In a statement given out by Messrs.
D. r. Coker, M. F. H. Gouverneur and
John F. Burton, who are members Of
the reserve board at Richmond. we
are assured that there is plenty Of
money to finance the holding Of cot
ton by southern people. This mon
ey," they say, "can be had by the
banks at low rates Of interest, and all
Of them can probably afford to lend
1t on cotton at not above six per cent"
What better assurance do we need
than that?
The banks Of New York, Chicago,
and other money centers are really suf-
ferfng from too much money. The
money market in New York is one and
three quarters per cent for call mon
ey; two and one-quarter per cent for
sixty days; two and one-half per
cent for ninety days. and three and
one-quarter per cent for six months.
The tide Of gold coming in from Europe
for the purchase Of supplies threat
ems to overwhelm them The banks
of New York alone hold a reserve Of
over six hundred million dollars, four
hundred and twenty-five million dol
lars Of which is in gold. One year ago
we were complaining Of the enforced
shipments Of gold to Europe for the
purchase Of American securities, and
the stock exchange was closed to pre-
vent a panic. Now New York does
not want Europe to ship any more gold
to pay for supplies here, but is trying
to arrange a great credit for Europe
of a billion dollars, based upon Ameri-
can securities and government obli-
cations, so as to maintain the rate Of
foreign exchange and afford a basis
for the purchase Of supplies. Repre-
sentatives Of France and England are
on their way to New York now for this
purpose, and I was told in New York
that the government and the Federal
reserve board would be asked to CO.
operate in arranging this credit for the
maintenance Of our foreign trade. II
that be true, then it will not be diff
cult to arrange for the purchase Of a
sufficient quantity Of cotton to establish
a fair price, in line with the sugges-
tion I made to President Wilson on
August 5th, for the use Of a portion
of this credit in securing cotton for
the Allies. The important thing Is
that the producer should get the bene-
fit. and not the middlemen, who have
been getting all Of the profit for the
past thirty years out Of our crop. 1t
goes without saying that the Federal
administration has ample power to
carry out the promises which they
have made to the cotton planters Of the
south.
l do not think that technically, ex-
cept for the temporary interruption Of
foreign exports, cotton has ever been
in such a strong position. I am thor
oughly satisfied that the close Of the
war will find the world short Of cotton,
and that prices will go as abnormally
high as they have been low. I do be-
lieve, however, that there is concerted
movement, just as there was last fall,
to force just as much Of the present
crop out of the hands Of weak holders
as possible, and I wish to warn our
people against being caught by sus-
piciOus reasoning and making a sac
rifice Of their cotton. Secretary Hes
ter tells us that the spinners Of the
world manufactured into cloth and
other commercial articles during the
past year 14,133,O00 bales of cotton. If
that be true, then there cannot be
much reserve cotton on hand, and the
,tn 80 o., dc IN,