Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1919-09-16


Could Protect Themselves it they
Would 90 at the Matter in the Right
Way.
The following letter from Hon. John
L. McLaurin of Bennettsville, address"
ed to Hon. Mack King of Anderson
under date of September IL contains
late information in connection with
thes financing of cotton that is worth
while:
Yours quoting from a speech inade
in Anderson in 1916 rs follows:
Cotton went down first. it will be
the last to rise and remain UP longer
than any other commodity" You ask
my opinion now. 1t is tie same as
then, expressed. In 1916 price fixing"
was unknown, as we'll as the threats
by war industries board. In the long
run government authority cannot per-
manently overturn natural economic
law. Ultimately the price of cotton
will be fixed by the volume of money
In circulation and the supply and de-
rnand for cotton. AS to whether or not
tho farmer will get the benefit sure tc
come from the unrestricted operation
of these laws depends upon his intel
ligence and the means at his disposal
to carry his cotton during the period
of readjustment through which we are
passing. I hope that the cotton asso-
citation under the able leadership Of
Mr.. Wannamaker will help us. 1t is a
complicated situation with which we
are confronted.
King Cotton.
The south has natural monopoly
in the production of cotton. Some da!
we will comprehend and utilize it,
when we do, our section will be q
dominating figure in world finance.
Up to 1914, our cotton crop was the
main factor in the nations balance OF
foreign trade, but it never did the
south much good except Indirectly.
When war was declared the throne
was usurped by war material and
food. The present situation is a real
struggle by king cotton to regain his
lost throne. The price of cotton is
largely a matter of utilizing credits
Up. to the state warehouse develop
nent cotton was good basis of credit
on. everybedy's hands except the mar
who grew it. Now it is better credi;
in the hands of the farmer, than any.
one else. This is splendid basis from
which to work. 1t Is not generally
known, but in section 18 Of the FEEDER
al Reserve act, the farmer can dis
count rent notes and crop mortgages
as. we'll as actual cotton. We lack
the proper machinery to use these Sc
curities to pay the expense of tht
coming crop. If we did this, it would
tighten the load on the actual cotton
in tho spring.
Direct Sales.
I am more firmly convinced than
ever in my life, that the development
of q state warehouse system in every
cotton state is the only effective solu.
tion of the problem. 1t was n grca;
step to go as far as we did in enab-
ling the famer to hold his cotton, bor
row' money and pay his debts, but
otter all cotton is made to sell and not
to store. The middlcmcn arc getting
too much of the profits. In this coun- =
iyh ho 10
profit on long staple. 1t doesn't matter
where the price goes under the pre-
sent system, the middlemen get more
clear profit from handling the cotton
than the farmer docs from growing it.
/ hoped to add the direct sales to the
state warehouse, but l could not move
one step without state insurance on
stored cotton and bank in connection
- with the system; those interested in
making money out of existing condi-
tions had sufficient political power TO
prevent me from getting the lcgisla-
tion that I needed. / refused to re-
main commissioner merely to store
cotton and finance it.
. What Might Have Been.
Let us suppose, l could have Sc
cured this legislation, what could be
done today.
The world is clamoring for raw cot
ton. There are plenty Of ships to carry
it abroad, the only difficulty is that
Europe is unable to pay and lacks the
credit There is no machinery through
which this credit can be extended.
The rate of foreign exchange is pro-
hibited. Gold for exchange has prac-
tically ceased to move from this coun.
try for commercial purposes. We arc
being throttled by the available golo
of the world being dumped upon us fol
war materials. The pound sterling is
normally s4.S65. 1t is now around Si.2O
This means that if an English mil
purchases S1O0, 900 worth of cotton The
discount would be about $4,000. If i
was a German merchant the discount
would be Is per cent. because th'
mark now sells in New York for
cents. This foreign exchange rate il
based upon the principle of the can
collation. of Indebtedness. Trade bal
i IL u