The herald and news. [volume] (Newberry S.C.) 1903-1937, 1916-01-18

Norwood OF the UulOn NdlIoudI pduh'
this city, came to my relief in che
matter of loans on state receipts, and
l can not speak in too high terms of
the generous support which he has ac-
corded. Mr.. C. C. Rowland of Sumter,
Mr.. B. c. Matthews Of Newberry and
others have also shown every disposi-
ton to give proper support.
Character of Receipt Established.
feel that the first step towards
making the system success has been
taken by establishing on firm basis
the character of its receipt; and that
we have succeeded, with cotton at II
cents, in establishing 175 warehouses
in the state is a sufficient assurance
of the value which the farmers place
on a means to store their cotton at
home, saving the expense of freight
and high storage rates, and with a re-
ceipt which enables them to secure
money at 6 per cent-and some OF
them, when borrowing large amounts,
at 5 per cent.
At the time of writing this report,
between the 25th of December and the
first of January, there are approx
mately $4,000 bales of cotton on stor-
age in the state system, and approx
n1ately 10000 bales have been handled.
In other words, the state system, dur
ing the first season of its existence,
has handled and is handling about
$4,000, 900 worth of cotton, with cotton
fuctuating between II and 13 cents.
It is safe to say that nine-tenths OF
the state receipts issued upon this cot
ton have been used as a collateral Tor
/ borrowing of money, or as security IN
some form against liability or invest
ment. Up until the establishment of
the state warehouse system per cent
money was practically unknown in
South Carolina; certainly it had never
been secured by those whose labor con-
stitutes the real wealth Of the state.
Nominal 8 per cent discount, but IN
reality 9 and 10 per cent interest, was
the rule. A conservative estimate OF
the saving in interest which has re-
suited from the use of the state ware
house receipt is per cent. The state
receipts now outstanding represent Sc
curities of some 81, 100000. The inter
est on this amount of money borrowed,
on a yearly basis, before the use Of the
state receipt, would have totaled at
least $4,000. With the state receipt
as a collateral, this interest is reduced
to not over $180,O00, a clear saving in
interest alone, in year when the price
of cotton from the very first was not
conducive to a holding movement, OF
$50 1000; and this does not include the
moral effect of 6 per cent money on
other forms of collateral, and of sta
bilizing the price above the cost OF
production.
Reduction in Cost of Storage.
AS to the expense of storage in state
warehouses, as compared with cor
porate or privately owned warehouses
I submit a letter from Senator ]. A.
Banks, showing the exact figures, and
giving an indication of the enormous
amount saved to the farmers of South
Carolina by low storage rates, made
possible Through the reduced insurance
selected by the state warehouse sys-
tenn, and the plan adopted of keeping
the cotton in the community where it
is grown.
Grading.
The state warehouse law under
which 1 am operating is not the meas
nre that I advocated before the general
assembly as the best plan. l desire
to call your attention to the act pre-
pared by Mr.. E. w. Dabbs and myself
at the request of the State Farmers
union. 1 am more convinced now than
ever that this is more scientlnc
plan. Take the grading Of cotton, Tor
example. There can be Hedoubt that
the farmers of South Carolina lose
thousands of dollars each year by the
undergrading of cotton. We have sworn
weigaers; why not sworn graders? The
idea in this Farmers Union bill was
fee of 25 cents on every bale Of cotton
grown or offered for sale IN Soup
Carolina, which would pay for weigh
ing and grading, this fund to be used
in the development of the state ware
house system, being entirely at the ex-
pense of the farmers themselves. Under
this plan we could organize a system
of state insurance, in cooperation with
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