Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1915-01-12
MCLAURIN MAKES REPORT
Operations Of Warehouse System
Laid Before Assembly.
Law needs IMPORTANT AMENDMENTS

Law needs IMPORTANT AMENDMENTS
The Appropriation Was Too Small te
Warran. Operations On a Stuff
eiently Extended Scale and the Com
missioner Ought to Have Authority
that Will Enable Him to Negotiate
Loans and Make Other Transactions
in the Interest Of the Owners o,
Cotton.
Gentlemen of the General Assembly:
Under an act passed at the extra
session of the general assembly last
year, and approved October 80, 1914
the sum Of fifteen thousand dollars
was appropriated for the purpose OF
establishing and putting into opera
ton what is commonly known as the
state warehouse system. That system
has been organized and is now in op-
Grafton, and the expenditures up to
this time are less than twenty-one
hundred dollars.
This report covers the period Of op-
Grafton from the middle Of November,
as we could not get our blank forms
before that date.
Beginning so late in the season, In
the face Of unprecedented financial
conditions a small appropriation and
an amendment forced on the bill In
the house forbidding payment Of rent
for warehouses until after all Of the
operating expenses were paid in full,
only attempted to organize the system
and perfect the machinery, depending
upon this general assembly to enlarge
the powers and provide the means for
it's development.
We now have twenty-eight ware
houses, with an aggregate capacity OF
$4,000 bales.
l will file supplemental report as
to the amount Of cotton on hand, rates
Of insurance, and every item Of finan-
cial transactions.
Plan Of Organization.
l did not have funds to pay insur-
ance in advance, and operating ex-
penses, as the standard warehouses
connected with a bank have. and I de-
vised a form of contract taking over
warehouses at q nominal rental Of one
dollar per year, allowing the leasor to
fix the rate Of storage and pay all op-
Grating expenses, including three cents
per bale per month to the state, which
calculated, If fifty thousand bales
were stored for ten months. would pay
the expenses Of the system.
This does not, however, carry out
proper conception Of state warehouse
system, which should provide as fol-
lows:
l. Cheap storage, with a low inter-
est rate, so as to encourage the gradu-
al marketing Of the crop.
2. Reducing the cost of marketing
by bringing farmer and spinner into
direct contact, eliminating middle
mems profits, to the advantage of pro-
ducer and manufacturer.
8. Transforming cotton into a ne
gotiable security that will pass cur
rent in the money markets Of the
world and afford an acceptable collat-
eral for use under the agricultural
section Of the new currency law.
The last named has been accomplish
ed, but l have not been able, under the
terms Of the present law, with the
$4,000 appropriation, to build ware
houses, nor have l been able to equip
them with proper fire protection and
mechanical appliances for handling
cotton, so as to give the cheapest stor-
age obtainable. AS l have stated, l
have only been able to lease them at
nominal rental.
l desire also to call your attention to
the fact that there Is no authority pro-
vided under the Warehouse Act for me
to aid persons with cotton on storage
to negotiate loans, nor is there any
authority to make sales Of cotton to
either domestic or foreign spinners.
What Can be Done.
After careful investigation, 1 am
prepared to say that the state Of
South Carolina can build warehouses
and store cotton at a rate Of ten cents
per bale per month, and put by a suf-
ficient amount in sinking fund to
pay for the property in period Of
twenty years.
With a compress, and with authori-
ty to act, 1 could sell cotton direct
from such a warehouse to the foreign
mills, saving the charges Of from six
to eight middlemen in each case.
A small commission on such loans
houses, and provide funds, after that,
for constantly adding to the number.
Middlemen's Profits.
If the state had one plant, as be-
ginning, located in Columbia, with a
compress, just at this time, the sale of
a single cargo Of cotton in Europe, at
being paid there, would have a tre-
mendous moral effect in advancing the
price of cotton. The enormous profits
which have been made in buying cot
ton at six cents and shipping it to Eu-
rope is we'll illustrated by statement
made to me in writing by a we'll
known citizen and former newspaper
writer Of this state, that certain brok-
ers in Savannah made up pool and
f1oated bonds for a half million dollars
to finance the purchase of several YES
sells, in which cargoes Of cotton were
shipped to Germany. This cotton was
sold there, these gentlemen stated to
my informant, at net profit Of four
teen cents a pound.
If any argument were needed, this
mere statement should be enough
Here is one man producing bale of
cotton at a loss Of twenty dollars;
here is another making seventy dol
lars clear for finding a market. What
excuse has government for existence
which cannot correct such gross in
equalities in the distribution of
wealth?
In time of peace l have seen the es-
innate Of expense from farm to mill
placed at from seven to ten dollars per
bale. A saving of five dollars per bale
would amount to five million dollars
annually. When we consider that the
price of cotton is fixed abroad, and
that which is sold abroad makes the
price of that entering into domestic
consumption. it is easy to see that an
increased price in the foreign market
would raise the price Of every pound
sold to our own mills
Credits Locked Up.
No man can accurately predict the
lo,rtb of tbic nor inst what the