Fitzgerald leader enterprise and press. (Fitzgerald, Ben Hill County, Ga.) 1921-1964, 1923-08-23
COTTON
WARE HOUSES
ARE PREFERRED
United States Reserve Bank Issues
Statement To That Effect

ATLANTA, Ga, Aug. ga move
ment is under way throughout the
South, according to announcement here
to induce cotton warehouses to oper-
ate under the provisions of the federal
law. 1t follows statements issued by
federal bank officials that cotton stored
under government inspection will be
given loan preference
Concerning the details of the plan
under which warehouses may be Ii
censed by the government and the
ernor M. Wellborn, of the Federal
Reserve Bank of Atlanta, covering the
states OF Georgia, Alabama, Florida
Mississippi, Louisiana and Tennessee
today said:
THE main purpose of the United
States warehouse act is to establish a
warehouse receipt that is easily and
widely negotiable as collateral for
loans and therefore of definite assist
ance to farmers in financing and mar
keting their crop in an orderly manner.
Upon application to the secretary
of agriculture, acceptable warehouse
men wilyl be licensed. In order to
be of good moral character and must
DC SOINSlll. Ills Wdl ll1liol
fully protect cotton against weather
damage and theft. The warhouseman
gives bond in favor of the federal
government, guaranteeing hisfalthtul
performance OF duty as public ware
houseman. A person suffering injury
by reason of breach of the bond on
the part of the warehouseman is per-
mitted to sue in his own name to re-
cover whatever damage he might have
sustained.
After a warehouse is licensed at
least four annual inspections are made
by federal agents to determine the re-
ceipts issued and Cancelled and the
amount of cotton on hand Insurance
policies, insuring the cotton against
fire, are also the subjects of these in
spections.
The inspections are thoro and the
warehousemen must account for all
receipts issued, by either presenting
Cancelled receipts or showing the cot
ton to be on hand in his warehouse
The law provides that the identical
cotton called for in the receipt must
be held in storage and delivered only
on presentation and cancellation of the
receipt issued for it. No substitutions
of cotton are allowed under the United
States warehouse act.
Cost Is Not High
The cost of licensing and bonding
cotton warehouse is only nominal.
The charges by the federal govern
ment for a warehouse storing not ex-
ceeding five thousand bales is only 81
for, the first year and 81 each year
thereafter. No charge whatever is
made for the inspection of the ware
house after the license has been grant
ed. The warehouseman must, of
course, pay his premium on the bondl
which for a warehouse storing not
exceeding one thousand bales is $50
year. If the wareshouse will store
as many as two thousand bales the
bond will cost $500 per Year The in
surance companies will grant a credit
from the rebular fire insurance rate on
all warehouses licensed and bonded
under the federal act. This credit oft
entimes more than overbalances the
actual cost of the bond. There is posi-
lively nothing bur6ensome in the OPP
Grafton of cotton warehouse i'll &C
cordance with the federal system. 1t
is required of the warehouseman that
he keep accurate records so that an in
telligent audit may be made of his
books from time to time.
Receipt Shows Value
All receipts issued by warehousemen
operating under the warehouse act are
uniform in their terms and conditions,
and this has tendency to equalize
their value in different localities. Gov
eminent supervision gives to these re-
ceipts value which cannot be obtain
ed thru other operations. A statement
of grade and weight on the receipt
furnishes an accurate basis of valua-
ton on the product in storage. Cot
ton, when represented by receipts is
sued under the warehouse act, is
brought into intimate couch with
those who have credit to offer. With
credit available and a definite idea of
the value of his product the producer
is in position to market his product
in an intelligent manner.
Last year slightly more than 1-3
of the cotton produced in the United
States passed thru warehouses licens-
ed and bonded under the United States
warehouse act. The outlook for the
SEASON just dHedu IS lot muCn Dettef
record than that attained last year
Bankers everywhere are becoming
more familiar with the safeguards
thrown around government licensed
warehouses and are demanding bonded
receipts as collateral to loans. Those
who store cotton in warehouses are
learning that 'oans may be more easily
secured on bonded receipts than on
non-bondedi ones.