Historical Newspapers of South Carolina

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Y.liniE LII, XOtflEK 9\ NEWBERRY, S. C. llvlHAY, DECEMBER 11, 1914. TWIC? A WEEK, llil A YBA? Facilities Nou Wnr Vim SAYS HOME BANKS CAN SAVt THE DAY: COMMISSIONER SETS OCT LOAN VALUE STATE'S COTTON RECEIPTS i I Tells of Interview in Washington and j and New York?Exhibits Letters iKmni Hoard?FUr mer's Note Ek'g/ble for Hediscount at R/chniond 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 ciany reierrea. 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 business principles. 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 "warehouse receipt. "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, S. C. "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. "Very truly. "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 'j Ample zncing Cotton 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 reserve act. "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 of applications. Respectfully, "C. S. Hamlin. "Governor." "Hon, A. F, Lever, "House of Representatives, "Washington, D. C." - ** ? .>/> r IT" K 1 lett oil AoveniDer -o ior wasn-i 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. ! I 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 measure." On my return to Columbia I ad-! dressed 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: 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 following 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 merrliant and accepted by a member rank, is sucn a paper engioie ior discount under section 13 of the federal reserve act? "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. "Yours truly, 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- ' i 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 ! J 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 Commissioner. "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. An Example. 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 I 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 Again (ieooinmended. FOLLOWING is President Wil sun's annual message. deliver ed ;it the beginning of the shurt term of the Sixty-third congress: 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 ward it. 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 them. 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 I Photo copyright. 1914, by American Press j Association. 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 tion. 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 without waste. 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 also. 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 OPENED. 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 GOVERNMENT FOR 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