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Y.liniE LII, XOtflEK 9\ NEWBERRY, S. C. llvlHAY, DECEMBER 11, 1914. TWIC? A WEEK, llil A YBA?
SAYS HOME BANKS
CAN SAVt THE DAY:
COMMISSIONER SETS OCT LOAN
VALUE STATE'S COTTON RECEIPTS
Tells of Interview in Washington and j
and New York?Exhibits Letters
mer's Note Ek'g/ble for Hediscount
The State, 9th.
"Now this means that we have two
avenues oof relief: First, the Wade
loan fund ($135,000,000): second, the
discount eature of the federal reserve
act."' said John L. McLaurin, State
cotton warehouse commissioner, yes- i
terday, in discussing the result of a j
* i X" 1- I
trip to Washington ana .\ew iumi
"In both cases the situation is square-1
]y up to the *banks in South Carolina
The federal government offers the
machinery; if we fail to take advantage
of the opportunity, we are responsible
for the consequences."
'Mr. McLaurin has prepared a statement
which defines the attitude of
the federal reser.e board and others
toward South Carolina's cotton warehouse
system. T e statement follows:
? . !
I am making this statement in reSDonse
to numerous inquiries as to
how mucfc money may be obtained
on State ware ouse certificates, and
you can hand inclosed copies to your
local banks and others interested. }
When in Washingtton I visited
treasury officials and conferred with
Mr. Harding, who seems to be the
member of the reserve board to whom
matters relating to cotton are espen
I will make a clear statement, just
as I see it, because our people nee3
enlistment on financial matters
more than on any other subject.
If tJ is question is to be settled to
our advantage, it must be 011 sane
Consulted ,>lr. Jle.idoo.
On November IT I addressed a letter
to Secretary \IcAdoo. setting forth
the terms o t'-'e warehouse and acreage
reduction acts, calling specific attention
to t':e former, viz:
"1. The title of the cotton is made
absolute to the holder of a State
"2. The weight, grade and condition
of the cotton are guaranteed oy the
+ /if r^-rnlina
VJ CM. LC v/i. W VU A V4>4AM,
"3. The identity o: each bale is
F.xed in the receipt so as to prevent
substitution. I give a 'heavy bond,
r nd bonds are exacted from managers,
weighers and graders.
"4. The State grants holders of receipts
permission to sue and establish
rights under same. This right does
not exist even as' to State bonds, as
they can be repudiated and the hold
er can not sue tne j>taie.
I asked Secretary McAdoo it" "a |
farmer's note indorsed by his lien
merchant and accepted by a member
bank, wouid be discounted by the
:ederal reserve bank at Richmond"
I sent a copy of this letter to Senator
Tillman and a copy to Congressman
Lever. The following letters are selfexplanatory:
"Washington, D. C.,
"December 4. 1914.
"Hon. Jo":n L. McLaurin, Columbia,
"My Dear Senator: I have just re- I
ceived tv.e inclosed letter from the
reserve board, which explains itsel .
1 had to write Secretary Mc-Adoo again
beiore 1 could get a reply, but I suppose
this was due to the fact thai
they were figuring just what kind of j
answer to give. If ! can serve yot: j
further let me know.
"A. F. Lever.' j
Reserve xi$o;ini Kepi < >.
"Federal Reserve Board.
*"IV?chino-rnn Dee. L\ 1914. I
"My Dear Congressman: Your letter
of November 13 addressed to Secretary
McAdoo was referred to and
lias been considered by the federal reserve
board. In this letter you transmitted
an inquiry from .Mr. John L.
McLaurin. State warehouse commissioner
for Sout Carolina, asking
whether notes and securities described
' J ? ? 1 . U I ^ P/\ ?* c*_
i." erein wou:u ue en^iuit; iui icuiocoiint
under the provisions of the federal
"In reply 1 am having forwarded
you today copies of all regulations issued
to date by the federal reserve
board relating to paper eligible or
rediscount by federal reserve banks.
"You will, of course, understand
that fe board can not consistently
make rulings on the subject of the
eligibility of any paper unless the rtqiiest
for such ruling emanates from
one of the federal reserve banks. The
general regulations of the board are
designed to inform both the public
and t1 e banks what qualifications the
paper must possess in order to be
eligible. T. ese regulations having
been issued, any interpretation of
them must be based upon a concrete
case growing out of an application for
rediscount made to a federal reserve
bank. You will, of course, appreciate
the fact that t~is course is necessary
to avoid con usion and to insure a
systematic and expeditious handling
"C. S. Hamlin.
"Hon, A. F, Lever,
"House of Representatives,
"Washington, D. C."
- ** ? .>/> r IT" K
1 lett oil AoveniDer -o ior wasn-i
ington. ac-compained by \V. D. Grist ;
of Vorkville. I found that Mr. Mo I
Adoo was off en a vacation and saw
the assistant secretary, Mr. Malpurn,
and John Skehon Willianms. 1 went
over the situation fully and was referred
to Mr. Harding. The latter nas
a thorough understanding of the situation
and expressed pleasure at th e
action South Carolina v.ad taken. He
agreed to bring the matter before a
lull board meeting on t:e following
Monday and communicate with me in
New York. On the following Tues-1
day I heard from Mr. Harding, as follows:
South Carol/ATs Leailersli/p.
"I desire to say that at us meeting
yesterday the board discussea the cotton
situation at great length. 1 reported
what had been done in South
Carolina and the individual members
0 the board were greatly interested. !
1 am sure ead" member of tr.:e board
is g'ad to know that your State has
taken the lead in so progressive a
On my return to Columbia I ad-!
dressed the following letter to Mr.
"Columbia, S. C., Dec. 3. 1914.
"Mr. W. P. G. Harding, Federal Reserve
Board, Washington, D. C.
"My Dear Sir: 1 tnanK you ior your
letter of 1st inst., addressed to me,
Imperial hotel, New York city.
"I find many inquiries awaiting my
return and I would like to get the
"If a note, with State warehouse
receipts as collateral, is given by a
farmer to a merchant for advances,
and the note is endorsed by the merrliant
and accepted by a member
rank, is sucn a paper engioie ior discount
under section 13 of the federal
"I would greatly appreciate also any
in'formation that you can give as to
t :e loans contemplated by tJ'.e Wade
plan. It seems to be understood a.?
little by our bankers as by farmers.
John Ij. .McLaurin.
"State Warehouse Commissioner.*'
Farmer s Xote Eh'er/ble.
T e following is his reply:
"Washington, December 4. 1014.
"My Dear Sir: Replying to your
k-rrer of the 3rd inst. would say that
it is the policy o this board to refrain
as far as possible from reply to in<iairifs
as to what const!:utes paper
< f:r .'Iisco.;rt :imh-r e;ion 13
of tfif federal reserve a<:. The heard
h:'s v>:;cd a (ireular on 'lit- subject
\\;-lch has been ]?nc*;l and wLich
i> in the hands of ail of t c federal
reserve banks and the board greatly
prefers that direct inquiries should be
made to the officers of the respective
federal reserve: hanks and I would respectfully
suggest that you refer inquiries
to the federal reserve han'rc of
Richmond. I have, however, no objection
to stating, .as a matter of per
sonal opinion, that notes given by a
armer 10 a mere, ant for advances ;
and indorsed by t! e merchant and j
discounted with a member bank are I
unquestionably eligible for rediscount
'tnnn too inrlnrepmpnr nf t o member
Lank, with a federal reserve bank.
"In regard to the cotton loan fund.
would say that cotton loan committees
have been appointed in the various
States and the South Carolina
committee is as follows: R. G. Rhet!.,
chairman, president People's National
bank, Charleston; Henry Schachte,
president Germania Saving bank. !
Charleston: E. H. Pringle, .Jr., vice |
president Bank of C. arieston. X. I). ,
A.: E. W. Robertson, president Xa- '
tional Loan and Exchange bank. Co- j
lumbia: C. G. Roland, president!
Bank of Sou?": Carolina. Sumter, and
-Tolln M. Kinard. president Conimer- j
cial bank. Newberry.
"I inclose for your information an ;
. . .. . . . , 1
unofficial analysis of r c plan wmcn j
lias been substantially followed in the |
completed dra:t and also a typical j
bank statement, showing how a bank |
can ease itself by participating in t!:ej
fund and place itself in position to i
discount more freely all classes of !
good paper that may be offered to it.!
"Very truly yours,
"AY'. P. G. Harding,
"Member Federal Reserve Board.
"Hon. .Ino. L. McLaurin, State Warehouse
"Columbia, S. C."
Two Kel/ef Sources.
Xow. this means that we have two !
avenues of relief:
1. The Wade loan fund
The discount feature oi' the fed- j
eral reserve act.
r 11 botfi cases the situation is !
squarely up to tJ e banks in South ,Car- !
clina. The federal government offers j
the machinery; if we fail to rake ad-i
vantage of the opportunity we are re- ;
sponsible for the consequences.
I have carefully over
I have been carefully over the pa- i
pers sent me by Mr. Harding and will
endeavor to explain them so the average
man can understand it. The Wade '
plan contemplates a loan for one year j
direct upon cotton on the basis of 6 i
cents per pound. There is a loan com- j
mittee in each State who .pass upon }
applications and they will soon make !
some announcement as to South Caro- j
lina. 1 found in New York that the j
mere statement by the secretary o the |
treasury that the loan fund was com- j
plote had a steadying effect on the j
market and created a better feeling in
financial .circles toward cotton.
In order to illustrate the operation I
of the Wade plan. I will suppose the j
case of a farmer who has just writ- j
ten to me that he has 600 bales of j
cotton in a State warehouse and de-1
sires a loan of $1"?,000. Mr. Harding !
said that one of f.ie difficulties t?:at j
he was experiencing was t;l:e title of!
the cotton and weights and grades? i
that banks were objecting to respon- ,
sibility on that score. This can cause !
no trouble in South Carolina, as our ,
State receipt covers title, weight and
grade. Supposing that the 600 bales
average middling and 500 pounds in j
weight. The receipts would be at- j
tac-hed to a note for $15,000; $3,750;
would be given my friend in Class B <
certificates bearing interest at the i
rate o; G per cent.; $11,250 would
be given him in cas'i. less 3 per cent., \
w^-ich is retained by the lean com- ;
mittee as a guarantee fund to cover !
losses that may occur in making
loans, and the expense of disbursing
the loan fund. The expense, it is
stated, will not exceed one-eighth of
1 per cent. The loan is made for a
period o" one year, and on the approval
of the committee may be ren
c.w,ir) fnr onntlior- ctv mnnthc
1 i v ?? V U 1 v/l IWVllVtiU.
When the farmer sells his cotton
arid retires 'ris $ir?.000 note, he pays
interest on t' e $ll,2r>0 at the rate
of 6 per cent, for t''.:e time he has
the money. He would also pay interest.
on the P? certificate, but this
interest he himself would set. The j
per cent, is he'd until the liquida- j
tlon of th'1 entire fnnd is complete, j
Tlit borrower pays '! 1-^ p >r cent, i
s*nc';!:* int. rest. includes " is 1
share of t' e operating expenses. bm I
does no' include losses to come out
of the 3 per cent.
The terms of tv.e loan forjid any
one to charge commissions for conducting
the negotiation for the loans.
The banks are expected to do this
gratis for theii customers and ca^i
(CONTINUED ON PAGE 3.)
i *?? ?t f r? i! n__i
ine unisi txecunve uepres
the Lack of Ships, Declares
I That the Government Ml
Open the Gates ot Trade and
Urges Passage ot the Fending
Shipping Bill ? fiura!
Orbits and Safelv at Sh.
Self Government For Filipinos
FOLLOWING is President Wil
sun's annual message. deliver
ed ;it the beginning of the
shurt term of the Sixty-third
Gentlemen of the Congress?The ses
sion upon \vhu*h you are now euieriuy
will be the Hosing session of the Six
ty-third congress, a congress, I ven
ture to say, which will long be remem
bered for the irreat body of thoughtful
and constructive work which it has
(lone in loyal response to the thought
and needs of the country. 1 should
like in this address to review the nota
ble record and try to make adequate
assessment of it. but no doubt we
stand too near the work that has been
done and are ourselves too milch part
of it to play the part ot historians to
Moreover, our thoughts are now more
of the future than ot the past While
we have worked at our tasks of peace
tile circumstances or me wuoie axe
have been altered by war. What we have
done for our own land and our own
people we did with the best that was in
us, whether of character or of intelligence,
with sober enthusiasm and a
confidence in the principles upon which
we were acting which sustained us at
every step of the difficult undertak
in;*. But it is done. It has passed from
our hands. It is now an established
part of the legislation of the country
Its usefulness, its effects will disclose
themselves in experience. What chief
ly strikes us now. as we look about us
during these closing days of a year
which will be forever memorable in the
bistorv of the world, is that we lace
new tasks, have been facing them
these six months, must face them in
th? months to come?face them without
partisan fcelim:. like men who have
forgotten everything but a common
duty and the fact that we are repre
"WE NEED SHIPS; WE HAVE
NOT GOT THEM."
The United States, this great
people for whom we speak and
act, should be ready as never
before to serve itself and to
serve mankind; ready with its
resources, its energies, its forces
of production and its means of
distribution. * * * We are
not ready to mobilize our resources
at once. We are not
prepared to use them immediately
and at their best, without
delay and without waste.
To speak plainly, we have
grossly erred in the way in
which we have stunted and hindered
the development of our
merchant marine, and now, when
we need ships, we have not got
sentntires of :i great people whose
a. ^ no Kn* Af n-hof \ TYiar
lUUli^ll I I> iJUl UJ UO, UUI UI >1 Uat *_> ULIc.*
ica owes to herself and to all mankind
in such circumstances as these upon
which wc- iook amazed and anxious.
War has interrupted the means of
trade not only, but also the processes
of production. In Europe it is destroying
n.en and resources wholesale and
upon a scale unprecedented and appalling.
There is reasou to fear that
the time is near, if it be not already at ;
band, when several of the countries of J
Europe will find it difficult to do for!
their people what they have hitherto;
been always easily able to do? many |
essential and \ indainental things. At;
. i i
::ny rate. they will need our neip ami;
our manifold serviees as they have'
lever needed I hem hi'Co re. and we
should be ready, more tit and ready
than we have ever been.
AMERICA FACES NEW i
MARKETS FOR TRADE.
Merchant Marine Must 8s Built Up t? j
Meet Opportunity. - .j
It is of equal consequence that the
nations whom Europe has usually sup-'
plied with innumerable articles of maa*
I ^SJSSSSStf^lk X: *M?B^SS?EEER
Photo copyright. 1914, by American Press j
uiacture find commerce of which they 1
are in constant need and without which
their economic development baits and
stands still can now <;et only a small
part" of what they formerly Imported
and eagerly look to as to supply their
nil but empty markets. This is particuiarl\
true of our owu neighbors, the
st.ites. jrreat and small, of Central and
South America Their lines of trade
have hitherto run chiefly athwart the
seas, not to our ports, but to the ports ,
of Great Britain and of the older eon |
tinent of Europe. I do not stop to in
quire why or to make any comment on
probable causes. What interests us
just now is not the explanation. Put
the fact and our duty and opportunity
in the presence of it. Here are markets
winch we must supply, and we
must rind the means of action The
United States, this jrreat people for
whom wt* speak and act. should be
rtindv us npvpr before to serve itself
and to serve mankind, ready with its :
resources, its energies, its forces of I
production and its means of distiibu- J
It is a very practical matter, a mat- j
ter of ways and means. We have the j
resources, but are we fully ready to i
use them? And. if we can make ready j
what we have, have we the means at i
hand to distribute it? We are not i
fully ready: neither have we the means ;
of distribution. We are willing, but
we are not fully able. We have the
wish to serve and to serve greatly, gen
erously. But we are not prepared as,
we should be. We are not readv to I
' _ i
mobilize our resources at once, we are
not prepared to use them immediately
and at their host, without delay and
To speak plainly, we hnve jrross'y I
erred in the way in which we have !
stunted and hindered the development
of our merchant marine. And now. }
when we need ships, we have not got
them. We have year after year debated.
without end or conclusion, the best ,
policy to pursue with regard to the
use of the ores and forests and water
powers of our national domain in the
rich states of the west, when we
should have acted, and they are still
locked up. The key is still turned
upon them, the door shut fast at which
' - C ? #,,11 nf
uiousunus oi \ men, iuii kji i
initiative, knock clamorously for ad- j
mittance. Tlie water power of our nav-1
igable streams outside the national |
domain also, even in the eastern states, '
where we have worked and planned
for generations, is still not used as it ;
might be, because we will and we
won't: because the laws we have i
made do not intelligently balance en '
couragement against restraint. We
withhold b> regulation.
1 have corue to ask you to remedy
and correct these mistakes and omissions.
even .-it ihis short session of a
congress which would certainly seem
to liave done all the work that could
reasonably be expected of it. The,
time and the circumstances are ex-'
traordinarv. and so must our efforts be
Fortunately two great measures, fine-:
ly conceived, the one to unlock, with
proper safeguards, the resources of the,
national domain, the other to encourage
the uso of the navigable waters
outside that domain for the generation
of power, have already pasced the
No Standing Army, but a
Trained Citizenry For War.
"We Have No! Eeen Negligent
of National Defense."
A Powerful Navy Needed,
"But Who Shall Tell Us
WhatSort of Navy to Build?"
To Learn and Profit by the
Lesson of Every Experience.
house of representatives and are ready
for Immediate consideration and action
by the senate. With the deepest
earnestness I urge tbeir prompt passage.
In them both we tnrn our backs
GATES OF TRADE MUST 3E
Ttia nnuarnmiint must fioen
these gates of trade, and open
them wde. oper. them before it
is altogether profitable to open
them or altogether reasonable
to ask private capital to open
them at a venture, it is not a
question of the government monopolizing
the field. It should
take action to make it certain
that transportation at reasonable
rates will be promptly provided,
even where the carriage
is not at first profitable, and
then, when the carriage has become
sufficiently profitable to at- .
tract and engage private capital V
and engage it in abundance, the
government ought to withdraw. J
upon hesitation and makeshift and
formulate a genuine policy of use and
conservation in the best sense of tboae
words We owe the one measure not
only to the people of that great western
country for whose free and systematic
development, as it seems to
me. our legislation has done so littlp,
hut also to the people of the nation
us ;i whole, and we as eleariy owe the
other in fulfillment of our repeated
promises that the water power of the
country should in fact as well as in
name be put at tlie disposal or great
industries which can make economical
and profitable use of it, the rights of
the public being adequately guarded
the while and monopoly in the use prevented.
To Mive be^un such measures
and not completed them would indeed
mar the record of this great congress
veiy seriously. I hope and confidently
believe that they will be completedSELF
FILIPINOS IS URGED.
President Says Senate Should Pass
Measure Now Before Senate.
And there is another great piece of
legislation which awaits and should receive
the sanction of the senate. 1
mean the bill which gives a larger
measure of self government to the people
of the Philippines. How better in
this time of anxious questioning and
perplexed policy could we show our
confidence in the principles of liberty
as the source as well as the expression
of life; how better could we demon??
o??if rkn???vc<5inn and
strait? uui. v?>n Kv.-.-v
steadfastness in the courses of justice
and disinterestedness than by thus going
calmly forward to fulfill our promises
to a dependent people, who will
now look more anxiously than ever to
see whether we have indeed the liberality,
the unselfishness, the courage,
the faith we have boasted and professed?
I cannot believe that the senate
will let. this great measure of constructive
justice await the action of another
congress. Its passage would nobly
crowD the record of these two years
of memorable labor.
Hut 1 think that >ou will agree with
me that this does not complete the toll
of our dutv. How are we to carry our
goods to the empty markets of which
I have spoken if- we have riot flu;
ships? How are we to build up u great
trade if we have not the certain an'l
tonstant means of transportation upon
which all profitable and useful commerce
depends? And how are we to
get the ships if we wait for the trade
to develop without them? To correct
the many mistakes by which we have
discouraged and all but destroyed the
merchant marine of the country, to retrace
the steps by which we have, it
seems almost deliberately, withdrawn
cur flag from the seas, except when,
iiere and there, a ship of war is bidden