The herald and news. [volume] (Newberry S.C.) 1903-1937, 1920-03-23

lneSe PURCHASERS, SuoIoiiiehe, "i1S''
they will give for the cotton, and If
the price offered is not satisfactory,
the farmer is in the position of either
having to take the unsatisfactory
price or of hauling his cotton back
home.
Such system, or more accurately,
lack Of system, has brought about an
economic and social tragedy in the
life of the South, for the South is
furthest behind in education, the
means of transportation, roads.
churches. and such other factors as
go to uplift and broaden civilization,
of any section of the country.
The outbreak of the world war in
1914 taught the people of this coun-
try how utterly unprepared they were
in many respects. For example, it
was found that we were dependent
upon two foreign nations for two of
the necessary elements of CONNER
cial fertilizer-for nitrate of soda
we were dependent upon Chile, and
for potash, upon Germany.
The most striking thing brought
out by the European crash, so far
as the South is concerned, was the
fact that we had no real system of
cotton distribution. AS result, it
will be remembered, that cotton fell
in price from IS or IA cents per
pound to five and six cents per pound,
and that, too, almost over. night.
The truth is that until the federal
reserve system began to function IN
the fall of that year, there was no
genuine market for cotton. 1t was
peddled upon the streets and those
who needed it bought it at the figures
they themselves fixed, without any
,, reference whatever to what pur-
chasers in neighboring towns might
be paving. If it had not been for
the vigorous action of the then sec
retary of the treasury, followed by
the opening up of the federal reserve
system for business, the cotton crop
of 1914 would have been completely
sacrificed, and bankruptcy would
have overtaken the South.
The Federal Reserve Act.
Fortunately, such situation need
not ever again arise in the South. A
wise legislative foresight makes such
a catastrophe wholly impossible If
the people of the South-producers,
distributors, merchants, business men
and all classes of people-will join
together to take steps which will
give to cotton the full value of the
measures which congress has adopted
in behalf of agriculture, and with
more or less especial reference to
cotton.
When the federal reserve act, per-
haps the greatest piece of legislation
ever enacted in this country, was in
it's formative stage in the house, the
friends of agric allure awoke to the
fact that the provisions of the bill,
while meeting fully the needs of
commerce and industry, did not ex-
tend to the matter of furnishing ade-
ouate credits to agriculture. The
credit paper of the merchant was
made eligible for discount through
the system, but the credit paper of
the farmer, representing. staple and
non-perishable products, was entirely
overlooked. Those who knew that
one of the most serious handicaps un-
der which agriculture had and was
then laboring was lack OF credit
with which to finance farm opera
tions were quick to M :shal their
forces to put into the bnI provisions
which would give relief in the direc-
ton mentioned. The result is that
part of Section 13 OF the tederal re-
serve act which provides that notes,
drafts and bills drawn or issued for
agricultural purposes, or based on
live stock, and having maturity not
exceeding six months, may be dis
counted through the federal reserve
banks.
Further provisions of Section IL
allow any member bank to accept
drafts or bills of exchange for agri-
cultural purposes (which are secured
! at the time of acceptance by ware
house receipt or other such docu-
ment conveying or securing title
covering readily marketable staples" ="
In these provisions of the law cot
ton can find a safe and sane method
Of financing. They open up to 1t
the credit resources Of the financial