The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1921-03-09
SECRET COTTON
DEAL OF 1915
Market Can BE Manipulated
Without Public knowledge
Manufacturers Rccord


II. G.. Harding, thon "A member and
now governor Of the Federal Reserve
Board, delivered an address before
the Alabama Merchants Association
at Birmingham. The next morning
the birmingham News edtOrially
stated that the address was devoted
Exclusively to the cotton situation in
the south, in the light OF the Euro
pcan war, and the decision Of the al
lies 10 make contraband OF cotton"
The News lauded Mr.. Harding as a
lifelong student Of finance, and de-
clared that "he treated his subject
with the skill and breadth of an cX-
| pericnccd banker, knowing precisely
how things have been done and how
things can he done"
| The News spoke moro truly than
| 1t knew. Indeed did Mr.. Harding
know precisely how things have been
done and how things can be done"
because making that speech the gem
tleman in question had been sum-
moned by the president and had been
instructed by him i'm reference to the
speech. And at the moment that
Mr.. Harding was telling the good
4
think serious results would follow
from the British order declaring cot
ton contraband, he knew, because he
had himself participated in the nego-
tiations. that an absolute understand
| ing had been entered into with the
| British government which guaranteed
the minimum price of every pound of
cotton i'm the United States. Yes, he
knew precisely how things have been
done and how things can be done"
| Cotton market figures for today
were higher than they were last Fri
day. ! don't believe serious results
will accrue from this order of con-
traband.' says the News report of the
| Harding speech. That was on Aug
ust 25. The Friday before had been
August ~. IL was the next day,
August 20, that the British officially
declared cotton to be contraband
which made operative the agreement
TO bring the price up TO minimum
| of 10 cents the pound.
The facts are interesting. The Brit
ish government had "felt out" the at
titude OF the American government
on the question OF declaring cotton
had been good American answer
I'VE will ship our cotton to ncutrals,
If and when we want TO, If it has to
be sent under naval escort" So
the British came back with q new
suggestion that If the American gov
ernment would agree only formally
to protest against the contra band or
der. they would guarantee that the
price of American cotton would not
fall but would rise to n minimum
price of 10 cents the pound. The
British ambassador. Spring Rice, was
conferring with the president him
self on the matter. The president
himself. at that moment, we have
reason to believe, felt that England
was fighting the battle of civilization,
on which account, as we'll as for the
greater good of tho cotton-producers
the deal would be justified.
Mr.. Harding was scheduled to
make an address in Birmingham. 1t
could be made an important utter
ance. Moreover, IL was requisite that
the south should be given soothing
word, as the announcement of the
lcontraband order was otherwise GER
tain to induce panicky conditions. So
! the president sent for Mr.. Harding
and they went over the situation to-
gether ut some length. 1t was decid-
cd that Mr.. Harding should sound q
! hopeful note, which should be rein
| forced by 81 letter from the president
| the hQpefulncss to be based on the
| Willingness OF the Federal Reserve
Board to help finance the cotton crop,
| o. nr hp tr,t n N
| that not economic law but Il secret
international agreement was the true
cause for the otherwise ineXplcable
rise in tho price Of cotton.
| The presidents letter, as quoted i'm
the News, was as follows:
THANK YOU sincerely for your let
ter Of August 23. It gives me just
the information 1 desired.
What interests me most is this.
II is evident from what YOU tell me
that the country banks with whom
the farmer and other producers di-
rectly deal can get money at from 4
to y per cent, and that the question
whether the benefit of this advan-
ltagcouS rate Is to bc extended to the
farmer is in their hands. for it is in
conceivable TO me that those who are
responsible for dealing directly with
the producers of the country should
be willing TO jcopardize the prosper
/ ity OF the country itself by refusing
TO snare with the producer the bcnc-
! hc!al rates now attainablc for money
loans. | think that we can conhdent-
| " expect that the banks i'm the cotton
states and i'm the agricultural rcriunS :
| generally, viii content themselves
with a rate not more than | or per
cent above the rate which they them
selves pay. ! hope that the facts
which YOU have stated to me will be-
come generally known among the
producers of the country so that they
may feel themselves, free To exact of
the banks with which they deal what