The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1918-06-29

'oN~ShAy VIC Stii nave q ittI6c UOOy
Of densely ignorant people who have
only begun recently to accumulate
and to advance towards the
better standard Of living and citiz-
enship.
The strongest factor in my judg-
ment (and I consider it highly legiti-
mate factor) which caused farmers to
hold cotton which had reached 35
cents in the South was the fact that
manufactured goods were then selling
on the open wholesale markets of the
country at prices ranging between 80
cents and 81 per pound. These prices
would have justified the mill paying
40 to so cents for their staple and still
agree fully that undue speculation
and the indefinite holding Of cotton
purely for speculative purposes should
be discouraged by the reserve bank.
There has been too much spot specula-
ton in my immediate neighborhood.
We must not lose sight of the fact,
however, that there is a basic differ
ence between the buyer who buys up
cotton or other comm odities and then
calls on the banking facilities of the
country to help him to speculate for
an indefinite time, and the actual pro-
ducer for whose protection it is nec-
essary that the crop be placed upon
the market during a long period O.
time"
Mr.. Seay's reply, dated June 3, is as
follows:
II am in receipt of your letter of the
first, which l have read carefully. We
agree with you quite closely in your
position with respect to borrowing on
cotton. 1t can be abused. and in some
cases has been abused.
"Of course, we would not under any
condition withdraw our support to all
legitimate borrowing on cotton, and
we are lending huge sums for that
purpose.
1--WE think 1t Is pertinent however,
to inquire as to the purpose for which
loan on cotton against receipts
dated back in October, November and
December is made, in which doubtless
you will agree. My position has been
that II money was desired for the new
crop raising purposes. 1t was all right;
If it was wanted for speculative or in
vestment holding. it was against the
regulations.
My associates were not prepared to
make the distinction which have
made above. They think that borrow
ing on one crop at this season of the
year to raise another is pyramiding.
and is essentially speculative, and ]
do not know that you can get away
from that position.
1--WE have refused but one loan with
cotton as a collateral, and that not
especially because it was on cotton
against old receipts, but because the
bank was borrowing too heavily
several times it's capital and surplus.
"The bank alluded to in this cor.
respondence is borrowing $185,OOO,
and its capital is 100000. This is
not excessive and we have not refused
any of the loans that I am aware of,
but have only made inquiries as t.
the purpose for which some recent
loans secured by cotton were wanted.
"You cen rely upon it that we have
been considerate. and will continue to
be so. and that nobody legitimately
entitled to loan against cotton ano
who is not abusing his privileges will
fail to get it."
The prompt action Of the committee
in securing these letters has brought
better understanding Of the cotton
situation on the part Of the federal re-
serve bank, which has done much to
IL
June l of more than six cents per
pound
Ed Wannamaker Of Orangeburg
was asked to explain his method of
computing the cost of raising cotton
grown by tenants. Mr.. Wannamaker
gave a detailed account Of the factors
and costs involved, placing the month
ly salary OF a tenant, wife and two
children at 500 per month and basing
his estimates on farm of 20 acres
His estimate showed that it would
cost 1926 cents per pound to raise cot
ton on the lines suggested by him.
The chairman Of the meeting was
directed to wire a vote of thanks to
w. p. G.. Harding of the federal re-
serve bank for his DaSt and prOn,ised