The herald and news. [volume] (Newberry S.C.) 1903-1937, 1916-09-19

transform cotton into a negotiable
security.
"2. 1t has established a new fact
in economics, to Wit, that you can
valorize products vitnin certain limits
by giving them special privileges as
a collateral.
"3. After the failure of the Wade
plan, it pointed out the true way
to make effective the federal reserve
law on commodity loans. 1 have on
| file in this Office letters from the
president of the United States. the
secretary of the treasury and the
president of the federal reserve board
in Washington, which amply confirm
these statements.
Benefits Of Warehouses.
eff We never take another step, the
State warehouse law has done moro
for the people than all OF the self
seeking, mouthy politicians in South
Carolina have accomplished since
1875. IF I felt that my presence here
was an absolute necessity, l would
shoulder my natural feelings Of in
dignation and continue to sacrifice
myself, but 1 think that l now have
the system where good, sensible
man can run it upon its present
basis Of furnishing collateral. II
there is any further attempt to devel-
op it, l stand ready, as an outsider, to
do all in my power to assist who
ever may be in charge. What it needs
now is:
,"1. Licensed graders.
"2. Direct sales.
"3. To become self-surpcrting.
"The insurance, properly handled
by the legislature, can be made to
support the system and furnish aid in
establishing direct sales. Few realize
the tremendous profits made upon in
surance. We have paid out around
$4,000 in premiums, while the
losses during that time amount to
only s1,197. The system should be
authorized to carry, at first, as much
as 1000 bales in cne place, and
reserve fund established from the
premiums to meet losses. Cotton in
excess of 1000 bales could be reinsur-
ed on the same plan that am work
ing it now or the State might be-
come co-insurer and diVide the prem
iums with the same companies that
are now carrying our cotton or others
with which arrangements might be
made.
Licensed Grading.
There is one thought in connection
with licensed graders to which call
your attention. At the time the State
warehouse system started, there was
no federal law upon the subject OF
grades. If we adopted the standard
grades of the department of agricul-
ture, and saw that they were enforced
either through federal or State law,
with proper supervision the South
Carolina grades would soon be firmly
established, and the certiloations OF
these graders make tle receipts pass
current in the money markets, or with
the federal reserve bank. Then the
portion of the act guaranteeing grades
and weights could be repealed, thus
relieving the State of this contingent
liability. It was necessary at the tlme'
in order to get the State warehouse
system started, but if this other plan
will work there is no need for the
State to run this chance, if the receipts
will pass without it.
There is another thing: I think
that the members of the State Ware
house association should establish
farmers bank TO handle our receipts,
and to accommodate the small State
banks and enable them to compete, in
discounting receipts, with the national
banks. I do not mean that this bank
should bid for deposits, or do CONNER
cial business in any way at all, but
merely handle paper eligible for dis
count at the Richmond bank. If the
annau Stoto hanks we're thOroughlY