The herald and news. [volume] (Newberry S.C.) 1903-1937, 1917-01-19

cotton went down to six cents, and
business was paralyzed. Conventions
and conferences were held In Wash
ington and in the capital OF every
State, and out Of the great masses OF
suggestions coming from every source,
the only thing that was heard was
the voice OF man from this State.
saving that all that was needed was to
transform cotton into negotiable Sc
curity, borrowing money upon the re-
ceipts, and pay the debts contracted III
making that cotton; boldly predicting
that the war would be sure to advance
instead of depressing the price of cot
ton in the long run. The legislatures
of South Carolina and Texas were
called in extra session and State
warehouse bills were passed. The
object of these bills being clearly st
forth upon the first page OF the 1916
report Of the commissioner, as fol-
lows: (Reads.)
Twenty. Cent Cotton.
Cotton is in the HeighbOrhOod OF
20 cents a pound and l do not hesl-
tate to say that one of the most po-
tent factors in securing that advance
has been through the South Carolina
State warehouse system. Not so mucn
On account Of the quantity Of cotton
stored, but because Of the confidence
that was inspired from the fact that
there was definite purpose and rally
ing point. Farmers were able to fl
nance their cotton and hold it off
the market. Let US briefly trace the
history Of this movement. The ware
house act became law on October
80, 1914. There can be no doubt that
the enemies of that act imagined that
they had so emasculated it that it
was impossible to put it into opera
ton. The appropriation was only
SIS .00O and there were such provis-
ions in it as almost negatived the
idea that it was possible to start op-
erations; for instance, the commits
sioner was forbidden to lease ware
house that did not pay expenses
How in the world could it be told
whether warehouse would pay ex-
penses until it was in actual opera
ton? This was put in there by de-
sign. The commissioner devised the
form of contract which evaded this
provision of the law and so inspired
the farmers Of this State with enthu-
, siasm that they furnished the capital
! and soon there were about 200
warehouses in operation. / have a
| copy of this contract on my desk and
anyone interested can see the great
simplicity with which this. great OBJ
stacle was overcome. At that time 1t
was impossible to secure any monev
! upon any kind of security, and as Mr..
/ McLaurin very we'll says, the first
| step was to establish the character of
the warehouse receipts for cotton. The
old form of the warehouse receipt left
the title of the cotton in question,
and the weights and grades. On ac-
count of the lien law and crop mort
gage system, there was cloud upon
! the title of every bale of cotton in
| the south.
Makes Gotten Free.
Mr. McLaurin's hrst move was to
remove this cloud because investors
: IN the north hao lost money from the
cotton's being claimed under a lien
or from the substitution Of inferior
! grades Of cotton and loss in weight.
To do this, the State warehouse sys-
tenn guaranteed for the State Of South
nf
the weight and grade. 1t was no
small undertaking, gentlemen, in that
time OF depression for one man to 90
to the money centers of the north and
show that warehouse receipt for
cotton was one Of the best forms OF
security there was upon the market.
There was no money being loaned on
warehouse receipts unless they had
behind them the credit of some large
banking institution, or a person with
high rating in Bradstreet's or Dun's.
The market for waehouse receipts
was strictly confined to the locality in
which the warehouse was situated.
where the character of The parties
conducting the same were we'll known.
The federal reserve act had just gone
into operation and the first step Mr..
McLaurln took was to issue a state
ment which l hold in my hand, dated
december 9, 1914. In that he made a.
clear analysis of the federal reserve
act and showed that the ony relief
that would come would be from the
treasury OF the Unite / States, declar-
ing strongly in favor of the cotton
warehouse receipts. At that time he
found the comptroller of the currency
and others were trying to use what
Is known as the Wade" plan to fl
nance the cotton crop. Many of you
Will remember the kilograms which
passed between Mr.. McLaurin and the
comptroller of the currency on this
subject. ANY one interested can read
this pamphlet which laid the founda-
ton for financing not only the State
L.