Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, December 11, 1914, Image 1

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YORKVILLE ENQUIRER. I ISSUED gEMI-WMKHLT. l. k. geist's sons, Pnbu.h?r?.} % <^ainilg jflrtrspaper: Jfor the {promotion of the {political, Social, Agricultural and Commercial Interests of the |eojl<. | established 1855. YORKVILLE, 8. O., FRIDAY, DECEMBER 1 t, 1914. NO. 99 Noveme THE DETECTIVE By HESKETB Copyright, 1913, by Hesketh Prich CHAPTER IX "Com? in, d??r Jo?." Our visitors hesitated outside the door. 'There are only two of them." whispered Planx. As he spoke, a short, bearded man in a thick overcoat stepped into the light, followed by a tall and strongly built companion. Both wore black visor masks, with fringe covering the mouth. I noticed they were shod in moccasins. "Evenin'," said the tall man, who was throughout the spokesman. "My partner and me is come to make you an offer, Mr. Planx. We've got your daughter where you'll never And her, where you'd never dream of looking for her." "Don't be too sure of that," growlX ed Planx. "If we agree on a bargain, she shall be returned to you unhurt three days t from the time the price is paid over, and that price is $100,000. "Those are our terms. The question v for you is do you want your daughter or do you not?" The next incident was as swift as it was unexpected. "I conjecture that is something of an easy question to answer," said Planx in his slow tones. "In fact, I"? On the word he slipped out a revolver. But quick as was Planx's hand to carry out the Impulse of his brain, Joe's was quicker. He knocked the revolver from Planx's grasp. "You treacherous dog, Planx!" cried the kidnapper. "Is that how you keep faith? Well, we have a reply to that too. We offered to give up the girl for $100,000, now we make the price $150,000." "I'll never pay a cent of It!" shouted Planx. "When you come to change your mind," replied the kidnapper, quietly, "Just hang a white handkerchief on one of the trees at the edge of this wood. Then put the money in notes in that tin on the shelf. Leave us two clear days and you'll get your girl back safe. But if you monkey it will be the worse for her." Without more words the two masked men left the hut, and, like the explosion of a thunderstorm, Planx opened upon Joe. November faced the storm with an , entirely placid aspect until I began to wondered at his patience. But when at last he spoke the other fell dumb as if Joe had struck him. "That's settled, Mr. Planx. You've done with me and I've done with you. Now quiet down and out!" Planx opened his lips as if to speak, but, seeing Joe's face, he changed his mind and rushed from us into the darkness. At once Joe put out the light. "We can't trust Planx just at the moment. He's fair mad, but we'll have him hoplr in half an hour to nhnw him the way back to Wilshere's," he remarked with a chuckle. And in fact this was exactly what happened. It was a subdued but still a very resentful Planx whom we escorted through the dark woods. On our way back to our camp Joe made a detour to examine the tracks of the kidnapers by the light of the lantern which he had carried with him. As had been the case by Moosehank lake, so now we found the trails very clear near the waterside. Joe studied them for a long time. "Well, you're out of it now, at any rate," said I. "And what about my promise to Calvey?" he rejoined. "I'm deeper in it than ever. I've got to find Miss Virginny, sure." "You can't track her because of that threat in the letter to Planx." "That's so, but I'll be speaking to Miss Virginny before tomorrow night." said Joe quietly, nor, having made this dramatic announcement, would he say more. The next morning Joe was early astir. "What are you going to do today?" said I. "I'm going to find out the name of the man that has Miss Virginny hid away. If you'll wait here, Mr. Quaritch, I'll come back as soon as I've done it You've got your rod and there's plenty of fish in the lake." With that I had to be content. Before starting Joe had laid a bet with me that he would come back with the name of her abductor, and I was won ueririB ?imi ciue lie imu iu gu upun. Hardly any that I could think of?the trail of the two men and the golden hair, very little more. About 2 o'clock I heard November hail me. "What about the bet?" I called on sight of him. "Who pays?" "You pay, Mr. Quaritch," said Joe. "Why. who is it, then?" "A fellow called Hank Harper." "Why, I've heard of him. He passes for a man of high character." Joe laughed. "All the same, he's the chap who done it," said he. "I expect he's got her up at his cabin on Otter brook." "Look here, November," I said, "you tell me Hank Harper Is in the kidnaping* business and I believe you, because I've never known you to speak without solid facts behind you. But I think you owe me the whole yarn." Joe pulled out his pipe. "All right, Mr. Quaritch. To begin at the beginning. There are two of them. One's this man Harper. I don't know who the o:her is. and it don't much mat tor. If we find Harper we find his paitner. Well, Miss Virginny was fishing when they stole down upon her and carried her off. I've already told you what happened until they took to the canoe. They paddled across the lake and the two men got t ut. leaving Miss Virginny in the canoe to paddle herself round and land elsewhere." "But surely she could have escaped!" I cried. i ser Joe. OF THE WOODS. I PRICHARD. tard. | "She was under their rifles and had to do exactly what she was ordered. I found where she'd landed and followed her tracks to that little waterfall stream, and it was there I found the golden hair. So far, you see, everything fitted in together as good as the jaws of a trap, and the message on the bit of paper about a ransom carried it further on. So did the talk we had with Harper?it must have ')een him did the speaking?at Black 'ake. When I knocked up Planx's revolver I was wonderful sorry to have to do it, but a promise is a promise, and he'd passed his word for a safe conduct After, when my eyes fell upon the trail left by Harper's partner, I knew I never done a better act in my life. It give me a start. I can tell you, Mr. Quaritch! You see, all the weight was in the middle of the moccasin. The h'eels and toes were hardly marked at all." November looked at me as if expecting me to see the meaning of this peculiarity, but I shook my head. "It meant that the foot inside the moccasin was a very little one, a good bit shorter than the moccasin." "You can't mean"?I began. "Yes," said Joe. "The second person at Black lake wasn't a man at all, but just Miss Virginny herself." "Well, If that was so, why, she had the game in her hands then. She had only to appeal to us?to speak." Joe interrupted me. "Hers was another sort of game. You see, I'm pretty sure that Miss Vlrginny has kidnaped herself, or, at any rate, consented to be kidnaped. She had just paddled round and Joined the two men later, and then when I come to think over It careful I saw how I might raise the name of the man that was helping her. I lit out for Wllshere's camp and asked the woman if there was anything of Miss Vlrglnny's missing from her room. She said there wasn't. Then I saw my way a bit I was in the woods with Miss Virginny last year, and I know she's mighty particular about personal things. I don't believe she could live a day without a sponge and a comb and, most of all, without a toothbrush. None of them high toned gals can. Isn't that so?" "Yes, that is so, but"? "Well," went on November, "if she went of her own free will, as I was thinking: she did?or else why did she come back to Black lake??if, as I say, I was right in my notion and she'd made out the plans and kidnaped herself, the man who was with her would be only Just her servant, in a manner of speaking. And I was certain that one of the first things she'd do would be to send him to some store to buy the things she wanted most. She couldn't get her own from Planx's camp without giving herself away, so she was bound to send Hank to hike out new ones from somewhere." "What happened then?" "I started in on the stores roundabout this country, and with luck I stepped into the big store at Lavette and asked if anyone had been buying truck of that kind. They told me Hank Harper. I asked just what. They said a hairbrush, a comb, a couple of toothbrushes and some other gear. That was enough for me. nfAi>an't \f ro T-TQ nlr wVia'o P halfbreed woman and don't always remember to clean herself o' Saturdays." "I see," said I. "The things were bought yesterday ?so it all fits in, and there's no more left to find out but why Miss Virginny acted the way she has, and that we'll know before tomorrow." It was well toward 10 o'clock that night before we reached Harper's cabin on Otter brook. At first we knocked and knocked in vain, but at length a gruff voice demanded angrily what we wanted. "Tell Miss Virginny Planx that November Joe would like a word or two with her." "Are you drunk," shouted the man, "or only crazy?" "I've tracked her down fair and square, and I've got to see her." "I tell you she isn't here." "Let me in to make sure for myself." "If a man comes to my door with a threat I'll meet him with my rifle in my hand. So you're warned," came from the cabin. "All right, then, I'll start back to report to Mr. Planx." On the words the door opened and a vivid, appealing face looked out. "Come in, dear Joe," said a honeyed voice. "Thank you. Miss Virginny. I will," said Joe. We entered. A lamp and the fire lit up the interior of a poor trapper's cabin and lit up also the tall, slim form of Miss Virginia Planx. She wore a buckskin hunting shirt belted in to her waist, and her glorious hair hung down her back in a thick and Hoqvv nlnit Sho nut her hanrl to Joe with one of the sweetest smiles I have ever seen or dreamed of. "You're not going to give me away, dear Joe, are you?" said she. "You've given yourself away, haven't you, Miss Virglnny?" Virginia Planx looked him in the eyes, then she laughed. "I see that I haven't but can I speak before this gentleman?" Joe hastened to vouch for my discretion, while Hank Harper nursed his rifle and glowered from the background, where also one could discern the dark face of the halfbreed squaw. But Miss Virginia showed her complete command of the situation. "Coffee for these two, please, Mrs. Harper." she cried, and while we were drinking it she told us her story. "You maybe heard of old Mr. Schel perg of the combine".'" she began. "My i father wanted to force me to marry him. Why. he's fifty by the look of him, and I'd much rather drown myself than marry him." "There's younger and better looking boys around, I surmise, Miss Virginny?" returned November, meaningly. Virginia flushed a lovely red. "Why, Joe, it's no use blinding you, for you remember Walter Calvey, don't you?" "Sure. So it's him. That's good. But I heard he was out of his business." said Joe with apparent simplicity. "I must tell you all or you won't understand what I did or why I did it. My father ruined Walter, because that would anyhow put off our mar riage. Then when the Schelperg affair came on and he gave me no rest I could not stand It any longer. You see, he Is so clever he would pay all my bills, no matter how heavy, but he never let me have more than $5 in my pocket, so that I was helpless. I could never see Walter, nor could I hear from him, and all the time Schelperg was given the run of the house." November was audibly sympathetic, and so was I. "Then one day this notion came to me. I planned it all out and got Hank to help. (I'd have asked you, dear Joe, if you'd been there.) Come now, Joe. You must see how good a pupil I was to you and how much I remembered of your tracking, which I used to bother you to teach me." "You're right smart at it. Miss Vir ginny!" "I arranged the broken rod, and Hank and his brother carried me to the canoe. Then they got out on the other side of the lake, and I paddled up near to the rock by the waterfall to put the police or whatever should be sent after me off my trail. I'm real hurt I didn't deceive you, Joe." "But you did right through?till you come to Black lake," Joe assured her. "But you did not recognize me then?" she cried. "And I'd put on a pair of Hank's moccasins to make big tracks!" November explained and added the story of his dismissal by Planx. "Well, it's lucky you were there, anyhow, or we'd have had poor Hank Bhot. That fixed me In my determination to get the money. I want It for all that my father has made him lose." "So Mr. Calvey Is In this too?" said Joe In a queer voice. "If you mean that he knows anything about it, you're absolutely wrong!" exclaimed Virginia passionately. "If he knew, do you think he'd ever take the money? It's going to be sent to him without any name or clew as to where It comes from. Walter Is as straight a man as yourself, November Joe!" she added proudly. "You know him and yet you suspected him!" "I didn't say I did. I was asking for Information," said Joe submissively. "But you haven't got the money yet." "No! But I'll get it in time." * And in the end Miss Virginia triumphed. She received her ransom in full, and it is to de doubted if Mr. Planx ever had an idea of the trick played on him. And I'm inclined to think Mr. Walter Calvey is still in the dark, too, as to the Identity of his Anonymous friend. But two things ire certain?Mrs. Virginia Calvey is a happy woman, and Hank Harper is doing well on a nice 200 acre farm for which he pays no rent. (To be continued.) CUSTOMS ALMOST NORMAL Deficit to be Met by War Tax Smaller Than Expected. Imports to the United States have been steadily gaining since early in September, until the government's current receipts from duties have almost overcome the loss due to the war's interference with trade. The customs collected in one day last week, were $782,833, as against $801,239 for the corresponding day last year. For the first three days of December, they totaled $3,121,331, against a total of J3.311.985 for the first three days of December, last year. For the first five months of the current fiscal year, the Federal revenues from this source are still so far below those which would have beerf collected in normal times, that the 'necessity for the 3100,000,000 war tax is evident, but if the present tendency continues the year's deficit will be much smaller than was contemplated by congress when it enacted the stamp taxes. From July 1, to December 3, inclusive, duties paid on imports amounted to 394,238,000, while in the corresponding period of 1913, collections were 3140,447,000, a loss of 346,209,000 this year. However, the Underwood tariff act did not go into effect until October 4, 1913, So that this comparison is made for the first three months against the higher rate of duties collected under the old law. The treasury department estimated that the Underwood tariff meant a decrease in customs of 35,000,000 a month on the same volume of imports, so that 315,000,000 of the decrease for the current year is accounted for outside of the war's effect on trade. The loss in customs directly tracable to the European conflict is slightly over $30,000,000, or an average of $6,000,000 a month, at which rate the year's loss to be met by the extraordinary stamp taxes would be in the neighborhood of $70,000,000. The records of the source of imports which have reached the United States, show that Germany's trade, while not paralyzed by the war, has been the heaviest sufferer. Since August, but ten per cent of the normal amount of German goods has been received by this country. For Belgium the percentage is slightly less, while France has lost 50 per cent of her export trade to the United States. On the other hand, England, Japan. Italy, Greece, and the Balkan countries have morlo oroinu in thalr av nort t T*Q H P t H ??UUV btt"?0 ??? v v. ?w this country.?Washington Dispatch to New York Times. ? King Nicholas of Montenegro, has telegraphed the Bourse Gazette at Petrograd, that a third of his army has fallen on the battlefield. "Nevertheless." King Nicholas adds, in his message, "Montenegrins will continue to defend their country and deliver attacks on the enemy's territory. Their means are exhausted and they will be most grateful for assistance either in money or supplies." The war strength of the Montenegrin army is estimated at approximately 50,000 men. A dispatch from Berlin, Dec. 4, said that according to an official announcement a number of transports escorted by British and French warships had reached Antrivari, the sole seaport of Montenegro. FOOTSTEPS OF THE FATHERS As Traced In Early Files of The lorkvllie Enquirer NEWS AND VIEWS OF YESTERDA1 Bringing Up Records of the Past and Giving the Younger Readers of Today a Pretty Comprehensive Knowledge of the Things that Most Concerned Generations that Have Gone Before. The first installment of the notes appearing under this heading was published In our issue of November 14. 1913. The notes are being prepared by the editor as time and opportunity permit. Their purpose is to bring into review the events of the past for the pleasure and satisfaction of the older people and for the entertainment and instruction of the present generation. NINETY-SEVENTH INSTALLMENT Editorial Correspondence. Warrenton, Fauquier County, V&., Friday Night, October 18, 1861. TV... TKIa mila? Kftlo town has been all agog since Tuesday. ?One day it was rumored that McClellan was advancing his columns, and that our army was retreating, burning valuables they could not carry with them; the next, all this was contradicted; then again we were told that our forces were marching upon the enemy. Wednesday morning expectation ran so high that a number, some soldiers, some citizens; left for the theatre of the anticipated conflict. The citzens have returned, and all is quiet now. Yet it Is the calm of preparation to receive stirring news; for the impression is left that McClellan, has been unusually busy?to what end we cannot now predetermine. A gentleman from Leesburg, reports that 30,000 Hessians have crossed the river at Harper's Ferry, and that our forces at Leesburg have fallen back seven miles. This column is thrown out, probably, either to occupy a defensible position in the fruitful valley of the Shenandoah, where they can be wintered with more facility than at Washington, or to flank Manassas in conjunction with a forward movement from Arlington Heights and Alexandria, If the former supposition be correct, a winter campaign is not likely; if the latter, one is highly probable? or at least one more deadly contest before the close of the season. You will remember that Lincoln, in his message to the summer congress, called for 400,000 men and 3400,000,000 to put down the rebellion; and that congress placed within his reach 500,000 men and $500,000,000. It has been said that these contributions were made, with the distinct understanding that something decisive should be done before the 4th of December, when their congress meets again.?You may suppose them to have reasoned thus: "We have given you all you ask, and more? our constituents will not stand such expenditures without results?they must see the fruits, or we must cry against this waste of public funds and impoverishment of the country. Give us brilliant prospects on the 4th of December, and we can afford to advocate the vigorous prosecution of the war." McClellan, perhaps, Is now about to loQva HJo atrr?no-hr?1Hc a nH r?nmp linnii us, for the double purpose of wiping out the stain of Manassas, and of doing "something decisive in the way of quelling all this 'artificial excitement.' " Fremont has done nothing in Missouri; Sumter Anderson, nothing in Kentucky; Rosecrantz as little in Western Virginia. If a Federal fleet has captured a sand bank of a fort and half a regiment at Hatteras, the "Turtle" has frighted the eagle from the mouth of the Mississippi. Everywhere by sea and land, the mighty invading hosts are at a standstill. Something must be done and very soon. Congress meets in six weeks; and they must have something to gloss over the folly and inhumanity of further contributions. McClellan?the young Napoleon of the west?is their man to do it. From all this it is evident that he will wage perhaps "a Waterloo conflict," before he closes the campaign; and the inference is strengthened by statements of our last letter. We believe?withour being confident, however?that he has already begun to mobilize Jiis army; though it will probably be two or three weeks before a general engagement. The very vastness and cumbersomeness of his army, will compel McClellan to move slowly; while the unexpected rout of Manassas has surely taught the Yankees a lesson of caution. When the day?or days it may be? does come, the encounter will be one to shake the continent. Three months for preparation have not been idly squandered by either party. Well armed and disciplined and powerfully sustained with artillery, a hundred thousand foemen will rush upon a wall of flesh and steel, in deadly, desperate, furious conflict. But let us turn from these bloody apparitions confined up from the near future, to the quiet walks of peaceful industry, and the lovely haunts of nature. Here, again, we wander in a circle. We cannot escape the all pervading influence. Wherever we turn our eyes, we see something to remind us of the shield of war, one side golden, the other brazen, hung up between the north and south. If we go to the workshops, we find them manufacturing bayonet scabbards, belts and cartridges; if to the parlor we see fair fingers busy upon uniforms; or if to the cookery, there angelic woman is preparing some delicacy for the sick soldier. If we go into the streets, the military garb s seen, and eager knots hanging about the shady pavements and hotel porches, devouring the papers, discussing the rumors, and talking of the war. Even we ascend a neighboring peak, there In the wild solitude of the mountains, we behold the white encampment of the marshalled host, dotting the distant plains. Speaking of cartridges above, we are reminded that Mr. John R. Spillman, a very ingenious and industrious me chanic of this town, has discovered a decidedly improved method of making them, for which he has secured the patent, or entered a caveat.?Mr. Sam'l Chilton, a refugee from Washington city, and the distinguished lawyer who defended Sickles in the Key case, kindly assisted us in getting into the manufactory, over the door of which was written "Positively no admittance." ? The machinery for manufacturing the I cartridge is exceedingly simple; and a dozen little boys can turn off 15,000 per , week. The wrapper Is twirled around ' a stick, a hollow cylinder at one end, and the paper is tacked In so as to retain the ball without the necessity of r tying. The ball is then dropt in und pushed down wltn tne otner ena or ine stick, as far as It will go?thus becoming powder tight. This is the labor of one person. Another pours in the charge of powder; while two or three other busy-flngered lads fold the paper over the open end of the cartridge and press It down firmly In a curious little machine constructed for the purpose. The cartridge is now complete, with i half the labor bestowed in the old method of making them; and we venture to say that the soldier can shoot three times with them to twice with the cumbrous things of the United States. ?When Mr. Spillman showed his design to Beauregard, he declared he had never seen anything compared to it; and ordered him to make every cartridge he could for the government. He is even tearing up old ones and reconstructing them on his plan. The "Spillman Cartridge" will doubtless supercede the one now in use; and Mr. Spillman, himself, must be regarded as a great benefactor of his country. We cannot conclude without giving you a brief account of a visit on Tuesday, In company with Orderlies Farr and Mason, to the Rappahannock Mountain. This is a beautiful peak six miles distant, midway between Warrenton and Salem. We started early in the morning after "Vlews-a-foot," determined to pass the day among the hills and grassy vales. On the way we halted at a Mr. Oaskins', where Mr. Farr had made acquaintances, and accepted an Invitation to call as we returned and dine. Soon we were standing on the top of the Rappahannock or "Wild-cat" mountain, with an ocean of plains spreading to the southeast, and the beautiful farms of upper Fauquier and "the free state" on the other side, while beyond them heaved skyward the wild and rugged peaks of the Blue Ridge In their mantle of cloud and smoke. This view Is said to be almost equal that so celebrated, from the White mountains of New England. The "free state" is part of a grant to Lord Fairfax in Colonial days. It was divided into small tenantries and a curious condition imposed on each tenant to whom a lease was given, was that he "must plant an apple orchard." A dozen or so large worm-gnawed, bird picked apple-trees, which appear to have sighed in the wintry blasts of centuries, stand now on the very summit of the mountain.?Most of the "free state" fell ipto the hands of Chief Justice Marshall in his day, and is still owned by the family. Although there 1b perhaps not a single respectable cottage on the whole of it?and it is near ten mile by six in extent, and although it was under cultivation a hundred years ago; yet much of the lands are said to be ndraf'fOO pel acre. What a comment on the folly of those farmers who can rip up a plantation in ten years! Mr. Qaskin is a fine old Virginia gentleman, living in elegant retirement r> a! ivVtk/mn#'! I 1/a Vilmaal^ Mivi i'l\f aiiii/ugoi 11^15iiuui a lint iiuuotii. n tui ij every one of whom has, or has had, one or more invalid soldiers with him, enjoying the bounties of a most generous hospitality. He pressed us to stay the night?to stay a week. We returned to Warrenton, however, wearied with the day's exercise, though enchanted with its experiences.?Bvery now and then our good "orderly"?who has a streak of the Arcadian in him?would break forth in praise of the rural felicty and bounty, everywhere pictured in the valley landscapes. Our own imagination was haunted with cold fountains and bubbling brooks, green pastures and lowing herds of fat cattle and flocks of fleecy sheep, well-fllled barns, granaries and dairies, while cottages and thrifty house-wives, and well-spread tables, until there rose before us a life of peace and plenty, health and happiness that would charm a miser's soul. The "orderly" thinks?and we are Inclined to side with him?that If one could transfer a Virginia grazing farm amid mountains, valleys and gurgling streams to South Carolina, it would be a miniature Ed'm. Too lengthily, Our Corporal. (To be continued.) WORKINGS OF RESERVE BANK Bowrrower Gives Note Which Gets Credit on Proper Approval. The mystery which veiled the alchemist of olden days is missing from the alchemist of today, the Federal Reserve bank, which converts a slip of paper bearing a promise to pay, into gold or its equivalent. Many inquiries have been received by St. Louis bankers conrprnlnp thp nrnotinnl nnaratlnri nf tha reserve system. A manufacturer of Springfield, Mo., who wishes to borrow $5,000 for ninety days will sign a note and present it to his bank. If acceptable, the bank will discount the note and give the money to the manufacturer. The bank now owns the note. This bank forwards the note, with other commercial paper, to the Federal Reserve bank of St. Louis for rediscount. The mail containing the note is placed on the desk of W. W. Hoxton, secretary of the board of directors of the reserve bank; Hoxton lends the note, with attached statements, to the credit department, which jots down credit information and sees that the bank's statement gives assurance that the proceeds are to be used in a commercial transaction. If the note and attached statements meet all tests, Hoxton presents the note to the executive committee of the reserve bank, which meets at 10.30 o'clock each morning. This committee is composed of William McC. Martin, chairman of the board; Rolla Wells, pnvomnr nf the hank* Walker Hill. Frank O. Watts and Murray Carleton. If approved by the committee, the transaction is entered on the books of the reserve bank, and the bank sending in the note is given the proper credit. The bank can then draw checks against this amount, or can request the reserve bank to remit it the entire sum at once. When the reserve bank runs short on reserve notes. Gov. Wells or C. E. French, cashier, presents an application to Chairman Martin, In his capacity as federal reserve agent. Martin then issues the sum requested to the reserve bank, and charges it up as debtor for a certain amount of reserve bank notes.?Oscar E. Riley in St. Louis Globe-Democrat. FINANCING OF COTTON. Commissioner McLaurln Gives Out Important Statement. TELLS THE FARMER OF HIS BIGHTS Complete Statement of Juat Where the Producers of the World's Greatest Crop Stands With Relation to the Re* gional Reserve System?Explanation of the Wade Plan?Responsibility of the Local Banks, Which Have the I u.... u..j :t tl.?i mvfliiv ui nviiwi m\ *i?nu 11 i iivj Will Um the Same. Hon. John L. McLaurin, state warehouse commissioner, has sent out the following: to managers of state warehouses. It is intended to explain the whole financial situation as the same relates to cotton, and is worthy of the most careful consideration of every cotton farmer as well as of every local banker: Dear Sir: I am making this statement in response to numerous inquiries as to how money may be obtained on state warehouse certificates, and you can hand enclosed copies to your local banks and others interested. When in Washington I visited treasury officials and conferred with Mr. Harding, w*io seems to be the member of the reserve board to whom matters relating to cotton are especially referred. I will make a clear statement, just as I see it, because our people need enllghtment on financial matters more than on any other subject. If this question is to be settled to our advantage, it must be on sane business principles. On November 17, I addressed a letter to Secretary McAdoo, setting forth the terms of the Warehouse and Acreage Reduction Acts, calling specific attention to the former, viz: "1st. The title of the cotton is made aDsoiuie 10 me noiaer 01 a siaie warehouse receipt. "2nd. The weight, grade and condition of the cotton are guaranteed by the state of South Carolina. "3rd. The identity of each bale is fixed in the receipt so as to prevent substitution. I give a heavy bond, and bonds are exacted from managers, weighers and graders. "4th. 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 holder cannot sue the state." I asked Secretary McAdoo if "a farmer's note endorsed by his lien merchant and accepted by a member bank, would be discounted by the Federal Reserve Bank at Richmond." I sent a copy of this letter to Senator Tillman and a copy to Congressman Lever. The following letters are self-explanatory: "Washington, D. C. December 4, 1914. "Hon, John L. McLaurin, Columbia, S. C. "My dear Senator: "I have Just received the enclosed letter from the Reserve Board which explains itself. I had to write Secretary McAdoo again before I could get a reply but I suppose this was due to the fact that they were figuring just what kind of answer to give. If I can serve you further let me know. Tours truly, "A. F. Lever." "FEDERAL RESERVE BOARD "Washington. "December 2,- 1914. "My dear Congressman: Your letter of November 13, addressed Secretary McAdoo was referred to and has been considered by the Federal Reserve Board. In this letter you transmitted an inquiry from Mr. John L. McLaurin, state warehouse commissioner for South Carolina, asking whether notes and securities described therein would be eligible for rediscount under the provisions of the Federal Reserve Act. "In reply I sun having forwarded you today copies of all regulations issued to date by the Federal Reserve Board relatino i-n n?npp elie-ible for rediscount by Federal reserve banks. "You will of course understand that the Board can not consistently make rulings on the subject of the eligibility of any paper unless the'request 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 the banks what qualifications the paper must possess in order to be eligible. These 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 this course is necessary to avoid confusion and to insure a systematic and expeditious handling of applications. "Respectfully, "C. S. Hamlin, Governor. "Honorable A. S. Lever, "House of Representatives, "Washington, D. C." I left on November 26, for Washington, accompanied by Mr. W. D. Grist, of Yorkville. I found that Mr. McAdoo o vonotlnn n nrl ha w the as - sistant Secretary, Mr. Malpurn, and Mr. John Skelton Williams. I went over the situation fully, and was referred to Mr. Harding. The latter has a thorough understanding of the situation, and expressed pleasure at the action South Carolina had taken. He agreed to bring the matter before a full board meeting on the following Monday and communicate with me in New York. On the following Tuesday I heard from Mr. Harding, as follows: "I desire to say that at its meeting yesterday the board discussed the cotton situation at great length. I reported what had been done in South Carolina, and the individual members of the board were greatly interested. I am sure each member of the board is glad to know that your state has taken the lead in so progressive a measure." On my return to Columbia, I addressed the following letter to Mr. Harding: "Columbia, S. C.. Dec. 3, 1914. "Mr. W. P. G. Harding, "Federal Reserve Board, "Washington, D. C. "My Dear Sir: "I thank you for 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 fol lowing information: "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 merchant and accepted by a member bank, is such a paper eligible for discount under Section 13, of the Federal Reserve Act? "I would greatly appreciate also any information that you can give as to the loans contemplated by the Wade plan. It seems to be understood as little by our bankers as by farmers. "Yours truly, "Jno. U McLaurin, "State Warehouse Commissioner. The following is his reply: "Washington, December 4, 1914. "My dear Sir:"Replylng to your letter of the 3rd Inst., would say that it is the policy of this board to refrain as far as possible from replying to inquiries as to what constitutes paper eligible for discount Iir,a^f Qootlnn 13 r\f the FVder&l Re serve Act. The board has issued a circular on the subject which has been published and which is in the hands of all of the Federal Reserve Banks, and the board greatly prefers that direct inquiries should be made to the officers of the respective Federal Reserve banks, and I would respectfully suggest that you refer inquiries to the Federal Reserve bank of Richmond. I have, however, no objection to stating, as a matter of personal opinion, that notes given by a farmer to a merchant for advances and endorsed by the merchant and discounted with a member bank are unquestionably eligible for rediscount, upon the endorsement of the member bank, witn a rcaerai teeserve 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. O. Rhett, Chairman, Prest., Peoples National Bank, Charleston; Henry Schachte, Prest., Germania Savings Bank, Charleston; E. H. Prlngle, Jr., V. Prest., Bank of Charleston, N. B. A., E. W. Robertson, Prest., National Loan A Exchange Bank, Columbia; C. G. Rowland, Prest., Commercial Bank, NewI berry. "I enclose for your information, an unofficial analysis of the plan which has been substantially followed in tnei completed draft, and also a typical | bank statement showing how a bank can ease itself by participating in the fund and place itself in position to discount more freely all classes of good paper that may be offered to it. "Very truly yours, "W. P. G. Harding, "Member, Federal Reserve Board. "Hon. Jno. L. McLaurin, "State Warehouse Commissioner. "Columbia, S. C." i Now, this means that we have two avenues of relief: 1st. The Wade loan fund. 2nd. The discount feature of the Federal Reserve Act. In both cases the situation is squarely up to the banks in South Carolina. The Federal government offers the machinery; if we fall to take advantage of the opportunity we are responsible for the consequences. , Wad* Fund. I have been carefully over the papers 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 direct upon cotton on the basis of six cents per pound. There is a loan committee in each state who pass upon applications, and they will soon make some announcement as to South Carolina. I found in New York that the mere statement by the secretary of the treasury that the loan fund was complete had a steadying effect on the market and created a better feeling in financial circles toward cotton. An Example. In order to illustrate the operation of the Wade plan, I will suppose the case of a farmer who has Just written me that he has six hundred bales of cotton in a state warehouse and desires a loan of $15,000. Mr. Harding said that one of the difficulties that he was experiencing was the title of the cotton and weights and grades?that banks were objecting to responsibility on that score. This can cause no trouble in South Carolina, as our state receipt covers title, weight and grade. Supposing that the six hundred bales average middling and five hundred pounds in weight, the receipts would be attached to a note for $15,000. $3,750 would be given my friend in Class B certificates bearing interest at the rate of six per cent $11,250 would be given him in cash, less three per cent which is retained by the loan committee 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 one per cent. The loan Is made for a period of one year, and on the approval of the committee may be renewed for another six months. When the farmer sells his cotton and retiree his $16,000 note, he pays interest on the $11,250, at the rate of six per cent for the time he has the money. He would also pay interest on the B certificate, hut this interest he himself would get. *The three-per cent is held until the liquidation of the entire fund is complete. The borrower pays six and one-eighth per cent straight interest, which includes his share of the operating expenses, but does not include losses to come out of the three per cent. The terms of the loan forbid any one to charge commissions for conducting the negotiation for the loans. The banks are expected to do this gratis for their customers, and can afTord to do so, as they will receive the money on deposit or debts due. Now, with the Federal Reserve Act, we have a further enlargement of their sphere of usefulness. The committee appointed by Mr. McAdoo, after congratulating him upon his ruling as to warehouse receipts, said: "That the average market value of middling cotton for the past six years has been in excess of twelve cents per pound." "That cotton does not deteriorate when properly warehoused," etc., etc. "It can therefore be carried over until the restoration of normal business conditions enables the world's consumption to absorb it. The committee therefore is of the oDinlon that everv effort should be made to assist the producers to hold their cotton for a price that will minimize their loss," etc., etc. The committee then suggested eight cents per pound as the basis for loans. In the Currency Act just put into operation there is conferred ample power to protect the producers of cotton against loss from lack of an adequate currency. The Southern Reserve districts are suffering from our available funds being tied up in the very commodity which we are trying to hold. There are, however, sources open to the Central board, of which Mr. McAdoo Is ex-officio chairman, that can meet the situation The underlying principle of the Federal Reserve act is that it is possible to marshall all of the assets of the entire system at its weakest point, Instead of, as heretofore, each bank being left to stand or fall alone. Under Section 10, sub-head B, five members of the Reserve Board in Washington, can, by an affirmative vote, require other Federal Reserve banks to- re-discount paper winch has been discounted by the Richmond bank, and this with or without the endorsement of the member bank. So far as I can see, there are no limitations to the amount of such discounts. Under Section 15 of the Act, Federal Reserve notes are issued at the discretion of the Federal Reserve Board in Washington, for the purpose of making oHvnn/?M tn TiV>Hppfl 1 Rpqprvp hanks. The only collateral security required Is a collateral equal to the amount of the Federal Reserve notes issued, and is defined as being the notes and bills accepted under the provisions of Section 13, which I have quoted, as entitled to discount without reference to the capital stock and surplus of the bank, when for agricultural purposes "based on actual existing values," to-wit, warehouse receipts for cotton, as construed by Mr. McAdoo's statement last August, and the letter of Mr. Harding above set forth Again, under Section 15, the secretary of the treasury can deposit, from the general fund, any money in the treasury except the five per centum fund for the redemption of outstanding national bank notes and the funds provided in the Act itself for the redemption of the Federal Reserve notes. I believe that money should be issued as nearly direct to the people as possible. It belongs to the people; it is made by their agent, the government, whose flat Imparts legal tender without which it is not money. Its true economic function is as a measure of value in exchanging the fruits of labor. This new currency law, properly un- i derstood and wisely administered, is i the greatest boon in finance ever con- ] ferred upon man. In time it will solve the problem of the "predatory rich," 1 underpaid labor and depressed agricul* - '? i 1 ? J I? ?UA ?..K . turai products, tui invuivcu m wc ouwtle process of making, issuing and control of money. It is the first effort to impart elasticity to our currency system, and is a distinct recognition of the i fact that credit, not gold, is the real ( money that is carrying on the commerce and maintaining the civilization 1 of the world. < The farmer, with his cotton trans- | formed into a liquid asset, has only one , barrier, the local bank, between him and his government. 1 What to Do. 1 I think every bank should Join the reserve system. I see that is is to be definitely decided soon upon what 1 terms state banks may enter. There I snouia oe intelligent co-operauon between the farmer, lien merchant and banker. The Bankers' association should agree at once to take notes with warehouse receipts as collateral, all agreeing on the basis upon which discount and loans should be asked for. If the plan is to be for more than the discount period, then the note should be negotiated through the Wade loan fund; if for short time, through Richmond. Let us remember this; that we cannot establish an arbitrary price, but must devote our energies to establishing a free and natural market for cotton, merely holding until this can be done. Cotton is selling under distress now. There is no established price. It runs from five to seven and a quarter cents, depending on whose cotton it is. It must rise, because: 1st. It is about four cents under the cost of production, and six cents under its average annual value for Ave jrcuio 2nd. European reeerves are exhausted, and it would bring twenty cents per pound in Germany today. The mills are still at work even in Belgium. I met a Belgian in New Tork who, it is said, is buying cotton for two years ahead. I also learned that the governments of Austria and Germany were buying distant futures in New Tork to protect their manufacturers against the advance certain to come with a cessation of hostilities. 3rd. The distress cotton is passing Into strong hands able to hold it. 4th. Acreage reduction of sixty per cent by law in India and Egypt. It will come either by law or necessity in every southern state. I do not look for a rise in price until after planting time, when acreage reduction is an accomplished fact, and not then unless some effort is made to provide ships and open foreign marketa Mr. Schwab has Just returned with a 160,000,000 order from Europe for the steel trust. There is no reason why I cannot, if authorized by the legislature, do the same for South Carolina cotton in England and on the continent. Acting for a sovereign state in an official capacity would be a great advatage in these war times. We cannot eat cotton, and must find a market at the earliest possible date. The only thing to give it a price is a demand from Europe. , To the Farmers. Do not sell your cotton to pay debts; put it into a state warehouse, get your receipts and offer your note with the receipts to your bank, fertilizer company or merchant. If you fall to do mis, men me enormous advance to come later will go to those whose labor did not produce the cotton. There Is ample opportunity given under the Wade plan and the Federal Reserve Act for the banks to provide funds to tide us over. This Is a large crop?probably sixteen and a half million bales. Twelve and a half million bales have been ginned. Out of this, American spinners have taken one and three-quarters million bales, and about one and one-half million bales have been exported, so that somewhere In the south there are around nine million bales, which financial pressure can force on the market Investors are greedily watching, and some definite assurance Is needed to convince them that this flood of cotton will not be turned loose. No one can give this except the southern banks. The Federal Reserve Board has fixed by regulation the operation of Section 13, which I quoted above, so as to show thot nn nrllH Inflo Hon \ a tn hn nnrmlt ted, but evidently Intend to extend relief bo far as the banks are willing to go. They leave It squarely up to the southern banks. It is up to the farmer not to lose his nerve but to stand pat. Refutation No. 6 says that until "further notice" the aggregate amount of the discounts of the six-month agricultural paper, shall not exceed twenty-five per cent of the capital stock of the Federal Reserve bank accepting the same. In Circular No. 13, the Federal Reserve Board shows that, while it is determined to proceed cautiously, It is prepared to meet all reasonable demands from the banks, saying "the limit will be Increased from time to time upon requests by Federal Reserve Banks to the Federal Reserve Board." I believe that this Democratic administration will do as much for southern farmers as it did for bond and stock holders in New York. The Immediate effect of the war was a rush to sell foreign-held American securities. The stock exchange was closed to prevent this slump in prlcea Mr. McAdoo organized a gold pool among the banks, and one hundred million dollars in gold was shipped to the Bank of England to protect New York securities. Under our twenty-five per cent gold reserve plan, one dollar in gold equals four dollars in paper currency. Thus four hundred million dollars of money was taken away, which, had it been used for the purchase of cotton, would have provided for onehalf of the crop. Southern banks contributed twelve million dollars of the amount High priced cotton will protect New York securities; it is what gave them their value, and It is the only thing that can maintain them. The entire United States is interested in maintaining the price of the one crop which turns the balance of trade in our favor. What cotton needs is friends here at home. What will the southern banks do? Respectfully, Jno. L. McLaurin, State Warehouse Commissioner. THE COTTON EXCHANGE Recent Experiences Have 8hown their Indispensability. At the montniy meeting 01 me ?uuuber of commerce recently which took the place of the annual banquet abandoned on account of the war, Arthur R. Marsh, formerly president of the New York cotton exchange, said in part: "Upon the outbreak of the war there was no means for establishing calculable value of cotton, or for distribution of the surplus of the largest crop ever produced in this country. At the moment when the European conflict burst upon the world, cotton became the greatest problem in the United States; and at that same moment there was pending in congress a bill of restrict operation of the cotton exchanges in this country. "Upon reopening of the cotton exchanges, there has been a congratulatory tone that has gone far toward restoring the confidence of cotton exchange members. To be called gamblers one day and public benefactors the next is an experience not to be forgotten by those who have been called upon to undergo it. We believe that today there is a new appreciation of the cotton trade and exchanges in this country. "Within a few years the United States will be called upon to produce 20,000,000 bales of cotton, and we see no reason for spectacular expedients for distribution of the surplus which we know can be regularly disposed of in a short time." In introducing Mr. Marsh, President Low of the chamber of commerce, said that the action of the banks of New York city upon the outbreak of the war in providing first for New York ilty's large obligations, payable abroad in gold; second, in contributing $45,100,000 in gold to the gold pool, and third, in contributing $50,000,000 to the (135,000,000 cotton pool, established this fact: "That hereafter there can t>e no accusation that the banks of New fork city are not, in a time of need of the north or south or east or west, patriotic."?Wall Street Journal.