The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1919-03-18
BIG COOPERATIVE
CORPORATION FOR
COTTON EXPORT IS
URGED BY HARDING
Suggests Congress of Cotton
Producers to Discuss Prof.
ect-COuld Use Liberty
Bonds In Payment
For Stock

w aSfllngtOn, March Ii.-Of-
ganization of a cooperative
cotton export corporation with
capitalization of perhaps $780,
100000 was advocated today
by Gov. w. p. G.. Harding of
the federal reserve board in a
letter to a southern newspaper
editor.
This corporation. organized uuder
the Webb act, solely for foreign trade
transactions, could be financed to some
extent by the war finance corporation
under the recent act authorizing IL
100000 00 to exporters, Governor
Harding suggested
In payment for the stock, southern
cotton producers and business men
participating in the corporation might
use Liberty Bonds which they hold.
thus eliminating the necessity OF tying
up large quantities of cash.
Mr.. Harding suggested that con
gress of cotton producers and other
business men be held at once to discuss
the project. He explained that by US
ing Liberty Bonds these would be held
by the corporation as permanent ~
vestments and would not be placed GA
the market. This would remove ANY
objection by government agencies -
exchange the corporations stock for
Liberty Bonds.
Every large manufacturing aud
mining concern has a well organized
sales department. said the governor
in his letter.
at would be suicidal for any large
manufacturer to devote his activities
to production alone. Many millions of
people are engaged in the production
of cotton, but of all our great indus
tries 1t is the only one. I believe, which
has no organized sales department..
MUST SELL OR HOLD
"A farmer or a merchant who has
cotton for sale must either take the
price offered him or he must hold his
cotton in the hope of obtaining a
higher price. and he has no assurance
that he will get a higher price by
holding. The cotton spinners have their
own organizations; those who have
cotton for sale have none The pres
ent situation is totally different from
that which existed at the close of The
civil war. Then the south was deyas-
tated its labor was demoralized and
the great problem was one of produe-
ton.
ACTUAL cotton commanded a high
price for several years after the wa:
the rest of the world was prosperous.
there had beenAno impairment In its
purchasing power; but today the credit
of most of the European nations is nee
essarily restricted, even England can
not afford to let go of her cash with
lavish hand in the payment of goods
imported; she has to watch her ex-
change rates with jealous eye.
France, Belgium and italy need goods
and raw material. but they also need
reasonable period of time In which to
pay for them.
The large manufacturing concerns
throughout the country are preparing
to take advantage of the act which be-
came law on April Is, 1918, common
ly known as the Webb act, which per-
mits commissions for promotion Of the
foreign trade. Under the act of March
10, 1918. which provides for the addI-
tional bond issues by the government.
the war finance corporation is EN-
powered to make loans to the extent
of $1,000, 100000 to aid export trans
actions during the period of one year
from the date of an official procla-
nation of peace, and 1t is allowed five
years in which to liquidate these
loans
For the war finance corporation to
consider applications from 10000 to 20,o00
individuals and farmers for assistance
III export trdnSdcllOnS would DC q dlI1l-
cult II not impossible proposition. owing
to the vast amount of time which would
be involved in the consideration OF each
application. A broad and dependable mar
ket for cotton is of vital Importance, not
only to the farmer. The producer OF the
staple, but TO every merchant, banker,
business and professional man throughout
the cotton belt.
LIBERTY BOND CAPITAL
I'm almost every hamlet in every south
ern state there are holders of United
States bonds. | believe that If the move
ment is properly directed it will be poss-
BILE to form a large export corporation.
the stock of which Will be owned bythose
directly interested in the production and
marketing of cotton. The capital stock
of such corporation might be invested
in Liberty Bonds. which would obviate
the necessity of procuring cash subscrip-
lions and would at the same time insure
certain dividends to the stockholders. The
corporation might be capitalized at $780,
900, 900, or whatever amount might be
found necessary to handle the business.
The corporation could send experts abroad
10 negotiate sales of cotton, to arrange
the terms, and to procure the necessary
guarantees of foreign banks. with these
in hand on proper security, ma
ton could apply to the war
finance corporation for aid. It should
have the power to purchase cotton out
right or to sell 1t on commission basis
for the owners. If general interest could
be aroused in the plan, a certain proper