Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1915-04-02
FINANCING The WAREHOUSE
Commissioner McLaurln Makes An
Interesting Statement.
Opens The way FOR CHEAP MONEY


The Receipt Guaranteed BY the State,
10 Recognized BY Regional Officials
and New York Finaneisrs A. Afford
ing the Best Collateral to Be Had,
and Arrangements Are Made Where.
by tho Full Benefit of the System
May Bs Realized BY the Individual
Farmer.
Editor Yorkville Enquirer:
desire to make a public announce
ment that on recent visit to New
York, in company with Senator ]. A.
Banks, we made arrangements so that
cotton in state warehouses can be A.
nanced at a rate Of interest on
straight loans not exceeding five per
cent, and on bank acceptances, at the
present money rate, including brokers'
mission, not over four per cent. The
only difficulty is on this end Of the
line, in providing the necessary ma
chinery. The most practical way is
to handle the matter through the To-
cal banks for the reason that the
large institutions in New York cannot
well deal with individual borrowers
desiring small amounts Of money.
In an article published in the Co.
lumbia State Of December 8, and
copied into most Of the county papers,
said that 1.-The new currency law,
properly understood and wisely. ad-
ministered. is the greatest boon in A.
nance ever conferred upon man. It
Is the first effort to impart elasticity
to our currency system, and Is a dis
tinct recognition of the fact that cred
it, not gold, is the real money that is
carrying on the commerce and main-
tanning the civilization Of the world"
In an address made by Mr.. Herbert
E. Eldridge Of the National City bank,
to the New York Credit Mems associa-
ton, on January 21st, he said: Cred
1t, the backbone Of trade, is built up
on the solid foundation Of character
and ability. Without such component
parts the structure Is insecure and
lacks permanency. No matter what
amount Of capital one may have en-
ployed in his business, credit remains
his most valuable asset"
For many years our cotton planters
have created vast national credits
which others have used to their own
benefit, making us pay heavy inter-
est for the use of our own credits.
In speaking Of the re-discounts un-
der the new currency law, and, more
recently, acceptances under the New
York state bank law, Mr.. Eldridge
said, in the same address: Taking
the south as an example and recalling
the evident desire Of congress and the
country at large to assist in its prob
lem Of caring for the large cotton
crop Of this season and the slow
movement consequent to the lessened
demand occasioned by the war, 1t
can be seen what degrees Of useful
ness the acceptance privilege would
have permitted. It cannot be expect
ed that a northern investing bank
should be familiar with the quality Of
the usual warehouse receipt issued in
the various centers Of the south. But
II such advances could be made
against bills drawn by the owner Of
the cotton on bank Of high standing,
the situation would assume far diff
ferent aspect. The accepting bank
would protect itself by the deposit
with it Of familiar warehouse receipts
representing cotton in sufficient
amount to amply protect it."
The state warehouse law was de-
signed to meet just this condition Of
affairs, and now is the proper time to
establish in the money centres their
value as a collateral. I have kept in
touch with the Federal reserve board,
and am greatly indebted to the kind
ness and intelligent aid rendered per-
sonally by Mr.. w. P. g. Harding, who
coming from the south, thoroughly
understands finance as 1t relates to
cotton. He gave me personal letter
in which he said, "The state ware
house law is, in my opinion, in ad-
vance Of anything that has been at
tempted in other southern states, and
appears to be model Of its kind"
New York financiers desire to main
tain that city as q financial centre,
and to do 80 must offer money at q
rate under the discount established at
the various reserve banks. This gives
the Federal board considerable power
over interest rates, by either lowering
or raising the Federal discount rate.
is to develop an acceptance and dis
count market in New York such as
has enabled London to make herself
the clearing house Of the world. The
National City bank Is showing great
wisdom In establishing branch banks
under the Federal law in South Amer
lea and elsewhere, so as to develop
our export trade.
Under the old national banking sys-
tenn we had a rigid money market,
producing such bankers panics as in
1907, because just as credits needed
expansion to avert panic, there was a
contraction Of credits, increasing
panic conditions. These acceptances
will make for elasticity by extending
credit when needed and automatically
retiring credit when not required by
actual business needs.
The new currency law, under its
power to fix the re-discount rates, will
eventually standardize interest charges
throughout the country, and, to some
extent eliminate competition as to
interest rates. 1t Is to meet this con-
dition that system Of acceptances Is
being established. One or two large
financial concerns in New York seem
to be preparing to make specially OF
the purchase and sale Of acceptances
This has never been done to any ex-
tent in this country, but in the money
centers of Europe 1t Is used very large
ly in commercial transactions. The