The herald and news. [volume] (Newberry S.C.) 1903-1937, 1921-01-07
FARM LEGISLATION
WILL BE ASKED

Continued From Page ~
must be distributed into the channels
of commerce in accordance with the
legitimate laws of supply and de-
mand. To market cotton in an order
ly manner so as to supply the legiti-
mate needs of consumption means
selling each crop through a period
of not less than IL months after
harvesting, and to do this success
fully and in satisfactory manner to
the growers, credit system based
upon baled cotton, properly ware
housed ard insured, must be devised
as an adjunct to the limited credit
facilities available under our present
banking system. The bonding of
cotton in the form Of short time in
terest bearing certificates, fully Sc
cured by high class collateral security
in the form of cotton stored and in
sured, is in full compliance with both
state and federal laws and does not
in any particular transgress the state
or federal banking laws. Large cor
porations in all sections Of the union
have used such system for years in
the orderly financing of their busi-
ness, and clearly no class of security
issued against any commodity, not
even gold, is superior to merchant
able cotton properly stored and in
sured.
sThe legality of issuing cotton
bonds as herein referred to has been
submitted to the study and opinion Of
some Of the ablest constitutional law
yers of the country and to the high
est banking officials of the nation.
In each and every instance no legal
objections have been found, but, on
the contrary, the most favorable IN
dersements have resulted.
{seWe present herewith a series Of
sound, practical reasons for the en-
actment Of cotton bonding law and
the practical advantages from issuing
cotton bonds:
First: It legalizes the issue of the
bonds and safeguards the validity and
security of such bonds under the SUI
peryision of the state.
Second: It guarantees to all hold
ers and purchasers of such bonds
that their payment is protected by
The highest type Of gilt edge security
held in the custody of the state until
the bonds are liquidated.
.sThird: Cotton bonds issued
against cotton stored and insured re-
tires such cotton from the market
during the life of the bonds, which
to that extent lightens the burden OF
supply of spot cotton, which is too
often used by spectators and ad-
verse interests to hammer down the
price.
8 Fourth: Cotton bonds supply a
medium of gilt edge exchange, 10y
which the original owners can liqua-
date their indebtedness while deyel-
oping and adhering to system OF
orderly marketing through the pros
per process Of selling to meet the
legitimate needs Of consumption, and
avoids the necessity Of dumping cot
ton on the market in a short period
Of time, which too often depresses
values below the cost Of production.
Better Than Receipts.
ssFifth: Cotton bonds are superior
in value to the holder or purchaser
than a note secured by ordinary
warehouse receipts, because the
bonds are protected: (a) by cotton
stored in bonds by EACH unit organl-
cation; (d) must show the weight,
grade and staple of the bale and that
the cotton is insured in standard COM
panies; (b) by the owners note'
whose standing and credit in the
community is carefully examined;
{c) by the unlimited liability of the
members of the cotton bonding COM
pany issuing the bonds by each unit
organization; (d) by the supervisor
of the state warehouse board, the
chairman Of which board will act as
trustee under the law, and safeguard
the possession Of the collateral secuf-
titles given to protect the payment OF
the bonds until the bonds are fully II
undated as to principal and interest;
(e) by the state banking department
which will from time to time exam
inc the books, records and securities
of each unit cotton bonding COM
pany organized under the law, and