Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1919-07-18
Beginning With Smith-kever
Act, He Aids Farmer in
Crises Of War; Embargo
and Price-Fixing
BY THEoDoRa FILLER.

and a. fair price. with the markets
of the world reopening and prices,
advancing to a reasonable figure, II
is now opportune to review a long
struggle here in washington land. a
successful one--to prevent utter de-
moralization of the cotton market
during the period of war
Before war came it probably will
be conceded that cotton's greatest
enemy was excessive speculation and
manipulation of grades on the cotton
exchange. With the European con-
flict there came contraband orders,
embargoes, threatened price-fixing by
the government and general chaos
respecting the law of supply and
demand. The outlook was discour-
aging enough, and at times the price
of the souths staple product was
even more discouraging.
Throughout the long period of UNI
certainty and upheaVal cotton mad
in the senate of the United States
at least one man who never faltered
in the fight for rehabilitation OF the
market and the maintenance OF a
price giving a fair return to the
southern producer, Cotton became
hobby with Senator Hoke Smith
of Georgia-if devotion to princi-
pie and the welfare of his constttu-
ents and his section may be called
hobby" With all his duties as a
member of the important senate com
mittees on Finance. Rules. judiciary,
Agriculture and Education and La"
Dor, the senior Georgia Senator al
ways found time to plead ably ana
effectively for cotton. ...
The Washington angle to the story
of the cotton fight is one OF ap-
| sorbing interest, 1t reveals things
behind the scenes that had vital
| bearing upon the South's trials dur
1t is not contended that Senator
Hoke Smith stood entirely alone in
| his fight for cotton. Unquestiona-
bly,, however. he was it's leader who
| drew around him little band OF
| southern statesmen pleading for fair
| treatment Senator Smith doubtless
spent more time, uttered more words
and expended more energy in the
legislative battle than any other man.
| He is appreciative today of the aid
I of certain of his colleagues. he is
| also not .unulindfui of the fact that
without the self-sacrificing support
| Of the Southern cotton farmers, the
merchants and the small country
banks-as well as the larger financial
| institutions which carried them--the
entire campaign might have met
early defeat
| The farmer held his cotton and the
merchant and the bank financed the
| courageous ldfilef Wiille ING ni6 b q
offensive was on here at the seat
of government. With such coopera-
ton Senator Smith kept eyerlastingly
| at it in Washington.
e The Harry Reform.
4 Prior to the year 1914 and the
outbreak of the war the New >4orR
cotton exchange sold cotton for fu-
| ture delivery, and, though normally
selling middling cotton as a basic
grade of trade, 1t permitted delivery
| Of twelve grades, all poorer cotton
than middllng. The exchange price
list, with it's worldwide publication
practically fixed the price OF mid
ding while the right to tender the
inferior grades enabled them to run
the price ;@of 1iiddlipg considerably
/ below value. 80.
In the spring of 1914, Senator e
D. Smith, OF South Carolina, and Sen
ator Hoke Smith, steered through
the senate bill excluding from the
mails matter relating to cotton eX-
| change transactions unless those eX-
| changes traded in the sort of cotton
prescribed. This was designed to
end the practice of substituting in
terior grades. and hurting middlina
prices eet' II. -. T .r'@-
! When the bill reached tie house.
! Chairman Lever, of the house agrl'
culture committee, Senator Smith
and the agricultural departm Mt re-
wrote tn chill on different plan
levying a tax on all sales of cotton
exchanges. but waving the tax on
cotton sold under a prescribed con
| tract. This contract permitted de
livery of four grades below miu-
ding, but required an estimate Of
| the true market difference in values
between middling and the lower
| grades. -',
This rewritten and perfected bill
| h1, hp and. q r
it came to the senate, Senator Hoke
Smith took charge of it and in con-
ference differences were adjusted
and measure of increased effective
ness presented to the two houses
which approved it.
This is known as the Smit1-Eevet
act. 1t became operative early III
1915 and fer several years kept fu'
lures and spots together. Las'
year. however, New York specula-
tors, because of changed conditions
and the non-use of lower grades in
manufacturing plants, succeeding III
| getting together quoto of two low
err grades and forced futures sew
eral cents below the spot market.
Senator Hoke Smith thereupon
| prepared an amendment to the reve
nue. bill which modified the Smith
Lever bill TO meet the lew situation
| 1t, cut out two of the lower grades
permitted under the original act
and now, with only two grades be-
| low subject to use, and with tn,
! agriculture department empowered
| to determine the actual difference IL
| value between these and middlins
spots and futures OH the New Yorl
| cotton exchange. they are kept sub
stantially together.
The story of cotton comes now IL
the war period with it's Internal ona
rather than purely domestic con-
| plica lions.
Government Aid Proposed II
| In the fail of 1914 the Europeaa
war suddenly cut off foreign market
! for vast quantities of cotton and
and six cents per pound With tile
south then affected more than any
| other section of the country. Sena
tor Hoke Smith offered a bill for
temporary relief proposing that tn
federal government issue, $250,00O,
600 in per cent bonds. due in two
years and Of small denominat ion, t.
be exchanged for cotton up to ten
cents per pound. This would have
permitted withdrawal of five mil,
lion bales from market. the same ii
be held until such time as the price
would care for the principal and in
terest on the bonds and expenses o.
| handling.
The bill was defeated, only two
Republican and two Democratic sen.
supporting the measure 1t wa.
| called evolutionary" yet. under
the stress of emergency for the ma
tion-such as then existed" for a
great SECTION of the country--tnr
administration which did not sup.
port the Smith bill has taken step.
which now make the Smith proposal
seem quite conservative.
In October, 1914 Senator Smith
learned no cotton was being ship
| ped to northern Europe and Enelisr
| papers said Great Britain was pre-
pairing to seize all cotton destined f
| northern Europe. Insurance con1pa
MES accordingly declined TO instly.
| cargOeS SO destined. shin nwnars