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AON. JOHN L., M STATE] REPOT Gentlemen of the General Assemblf: At your lase session I proposed a bill provided for grading of cotton offered for sale in the State by li censed graders. The crinhinal penal ties for wilful misgrading did not meet the approval of the Legislature and nothing was done. I am still of the opinion that this bill .should be made a law, but I will -submit one tipon another line applying only to cotton in warehouses, whether. State, corporate Or privately owned. The Federal Department .of Agri culture has been - making investiga tions into the loss to planters from undergrading cotton and the report mounts up into millions of dollars. This agitation for licensed graders is largely due to the South Carolina and Texas Warehouse laws. *We have done nlothing except agitate in 'South Carolina, but Texas has a compulsory grader's law which provides for sam ples being taken at the gin, and crim inal penalties for not doing so. I hr-ve not sufficient informatioi to ex press an opinion as to tne Texas law, but I do think that such a system is practical in South Carolina on ac count of the difference in our methods of ginning. I submit herewith a bill which contemplates the employment of three expert graders at the State Warehouse. Every warehouse receiv ing cotton to be stored is required to take one sample from each bale, to be tagged in duplicate order with the number and marks, so that both sam ple and bale' can be easily identified. The sample is sent to Colimbia and classified by grade and staple. A record of same is made upon the books here and the sample returned to the warehouse manager who sent it forward. He makes a record of same and files the sample, so that it is accessible, if called for. The re ceipt issued by the warehouse man ager gives the grade and staple and also the number and mark, so as to identify both bale and sample. The owner can sell the cotton on the dup licate, but I would expect cotton to be sold in large lots from these sam ples as they went through the State Warehouse office, a recora being made of them each day. Mills and cotton buyers could come to the State Ware house office and from these records be able to purchase only such grades as were actually wanted, and there fore could give a higher price. One of the troubles in marketing cotton now is that a mill has to buy cotton which it does not desire in order to get other cotton which it needs. This is a burden at all times on the cot ton market. A central market sys tem would be advantageous to both the planter and the cotton mill, as it would eliminate the expense of sev eral middlemen. Cotton always brings more money handled in large lots, especially when the mill can select from them exactly what it needs. Again, in parts of South Carolina the cotton territory is parceled out between certain cotton buyers or mills; this gives a monopoly, and there is no competition ;n prices. Un der the system to which I am refer ring a man could sell his cotton read ily through the State Warehouse. A perfect system of marketing cotton will never 'be attained, but having as sumed leadership it is the duty of South Carolina to go forward and do something each year to curtail the enormous waste in handling the crop. It is a little here and a little there, but the sum total amounts to millions. I believe that the waste in handling and marketing the cotton crop each year wouldl go far towvards feeding the people of the entire South. It is not a question of production, but one of conservation. T1he price of- cotton in tne past has been dlepres~sed more by uneoual (distribution than overp~ro we~tion. We were compeiledi by rca son of cotton not being a good collat eral for money *to sell a twelve months' supply within three months. The State Warehouse system of South Carolina is the first step ever mnade towvardls scientific distribution of the supply over an entire year or two years, if necessary. If properly dlevelopedI, it has unlimited possibili ties. In 1914 cotton was of no use as a collateral, and the South lost $400, 000,000.00 by the sacrifice of its cot ton crop. Cotton is now recognized wvhen represented by a proper ware house receipt as an unrivaledl security for money, and is eagerly sought by investors. 'rhe commodlity loan section gives the farmer the use of money at a rate of interest never known before. Instead of the reserve monies of .the nation being centeredl in Newv York, they are now dlistributed- in twelve centers. Tro take full adlvantage of this we must not only have wvarehouse room to carry agricultural products, but an effective system (direct to the manufacturers. The South Carolina lawv makes it the (duty of the Commissioner to aid in securing loans upon cotton and also to make sales of same at the request oif the owner. The State guarantees the weights and gradles of the cotton, but 10.s never provided a scientific method of dletermining such gradles. It requires expert knowvledge to gradle andl staple cotton, andl the average warehouse manager or gradler can only a pprox-. imate so as to make a safe collateral of the receipt, but not one which would be safe for the Warehouse Commissioner to make sales upon. A good grading system must be the foundation of a sales system, then foreign buyers- will be quick'to take adlvantage of such an opportunity to buy direct. By the time this reaches you I will have completed arrangements under which a letter of credit can be Issued by a-largce New York trust company, authorizmng dlrafts to be drawrn against receipts at three per cent, for 90 days, with 1-4 of one per cent. for acceptance, making 4 per cent, per annum, the receipts to be held by the Warehouse Commissioner for the cAURIN RESIGN AEHOUSE COM tT TO THE GENE could the farmers expect In accom modation? insurance. At the last session of the General Assembly' a bill was passed which de stroyed the insurance trust in this State. The insurance companies with drew from South Carolina in an. at tempt to force the Governor to call the Legislature in an extra- session so as to resenact this trust legisla tion. - Their animosity was particular ly directed fo this office, because of the fact that in my report to the Legislature I gave the rates of insur ance which we were receiving orn State cotton and contrasted them with the rates which were being paid when the State. Warehouse System went into operation. It has b en 'necessary for me to keep the nazmls of the companies se cret who are on, our blanket policy, but-you will observe irom Mr. Brad ley's report -that he had the policies and submitted them to the Insurance Commissioner,. who pronounced them all right. The reason for this is that the bitter fight , made by the Tariff Association on these companies would prevent them from getting reinsur ance. A systematic attempt has been made to break down the State Ware house System by dissatisfying the storers of 'cotton - with our insurance. It comes to our ears frequently where parties are told by agents of the trust not to put cotton in State Warehouses -"that the, insurance is not good." The members of the General As sembly will 'recall the hearing before the Agricultural Committee last win ter, when one prominent insurance man openly cast discredit on the State Warehouse insurance, and I could not resist the. temptation to disclose the fact that one of the largest old line companies, with a representative at the hearing; carried a portion of our insurance and that another well known old line company was on our blanket policy. Home Monopoly is Created. It is easy to understand how this legislature was created. The aver age legislator has-not the information necessary to understand such 'prob lems,, while the insurance interests. are forever busy .scheming and lobby ing to secure the legislation best adapted to the -ends sought. The in surance committees generally are in surance agents, which is just as wrong as to make up the finapee or agricultural committees exclusively of bankers in one case or farmers in the other . The legislative body trusts to its comittees, and, as a rule, adopt their reports, so that the personnel of the committee is of vital import ance, and the trust has subtle means to get the right men on the commit tees. It is in this way that legisla tion created an insurance monopoly which enabled the trust to whip all independent companies in line. The mutual and independent companies have been afraid to enter the State, lest this Legislatur recede from its position and allow them to be driven from the State after the expense of establishing agencies. I venture the assertion that if the General Assem bly stands firm in its determination to have- either competition or State regulations of rates, that within thirty days after adjournment there will be more insurance companies in South Carolina than are needed to do the business. In many cases, we have had to pay higher rates to 'get reinsurance. In other cases lower rates have been of teredl so as to induce the people either ,to quit the system or not go into it. 'ihe newspapers have been filled the enure year with statements that the insurance companies were making no mioney in South Caro:ina. A similar !ht has been going on in Michigan, T'exas andl other States. I have taken the trouble to get some of the news I s.rers from Lhose States, and the same statements are being made in them ,as are being made in the South Carolina newspapers. The same poli cies wvere pursued in all of those States. -In New Yorx the heads of some of the insurance companies openly asserted to me that they deC mied the right of the State to ques tion the rates at all. I did not at tempt last year to influence .insurance legisiation, except so far as it affect ed the State Warehouse System.I <idi, when calledl before the commit tee, give them such information as was in my pos.session and expressed an opinion when requestedl. Large Profits. I 'have put myself to some trouble to ascertain whether insurance was a pirofitable business or not, and I find that there is no business in the wvorld where the profits are so enormous as in both life andl fire insurance. TIhe real profits of the insuirance compa nies wvouldl not show in the premiums collected andl the losses paid as re portedl to the insurance commission ers. It is known as the "Bankers' Profit." The lapse policy in life in suac and the short term cancella tion in fire insurance showv a profit very nearly akin in principle. 'the three largest companies dloing business in south Carolina wvere the Hartford, the Home and the Conti nental. 'rhe Hartford has a capital of $2, 000,000.00; its ten year net earnings wvere eight and one-half million (do1 lars, nn anmtlal aver age of forty- two per 'cent, on the capitaz stock. Trhe capital stock of the Home is three and one-half million dollars- in ten years' its net earnings wvere tiair teen and one-half million doliars being an average of forty-two per cent. on capital stock. The Continental, which organized the F. I. U. 'A. in order to compete with the mutuals and which is 'spe ecifically excepted from the teri s. of the Laney-Odom Act, but which ith drew with he other companies, as a capital stock of two million d lars' in the te~n year period they d vided up in flet earnings $14,012,224 00, or ai average annual profit of inetvy four ner cent. nn th e captal stock MISSIONER; RAL .ASSEMBLY Before 10101 this company had only one million dollars capital stock and paid an annual dividend of fifty per cent. In 1910 they doubled their cap ital stock by transferring one million douiars froth surplus to capital and then continued to pay fifty per cent. dividends, equal to. one hundred per cent. annually on -the original capital stock. The Nuw .York Times of November 19,1915, contains the following: "The Continental 'Fire Insurance Company's melon of 'seven million dollars is ripe, and a one million dol lar plum will be added. They will in crease the capital stock from two mil lion to ten million dollars and still have undistributed profits of ten mil lion dollars. This will. amount to a melon of 350 per cent." High-Handed Methods. Under the monopoly created by the South Carolina insurance law large insurers in the State, able o deal di rectly through brokers in New York, coulk secure insurance rates at about one-half what other people -in the State were paying for the sam class of property. The cotton and oil mills and large property owners were get ting very cheap rates at the time of the passage of the Laney-Odom Act, largely at the expense of the smaller property owners in the State, who had no knowledge of what was going on. The chief complaint against the Warehouse Commissioner was not that he secured a low rate oi cotton, but that he told it. After the withdrrtwal of the cam panies I enabled a great many people in South Carolina to place insurance, and the withdrawing companies have found that it has been impossible to punish South Carolina as effectively as they did in Missouri and Kentucky. I published a notice in the papers of fering to see that insurance was placed, and did not fait in a single case where the risk was proper, nor have I heard of any loss from fire by reason of inability to get insurance. It has been a scare manufactured by insurance aLents, a "cry of wolf where there is no wolf." .Doubtiess you will recall, after the withdrawal of the companies, that wnite in New York with me Senator Banks placed a large amount of in surance through brokers at less than one-half the rate he was paying through their local insurance agents. He wrote an open letter to the paper calling attention to this fact, and his insurance was withdrawn simply be cause he told it. ,L the fact of this the leading daily papers in South Carolina tI have the dippings) were published to the peo ple that these companies were doing business at a loss, and while the peo ple of South Carolina contribute about three million dollars in prem iums they withdrew after taking all this money from the State because she wished to exercise the same care with regard to insurance corporations as ..t uoes to .cans, railroads and other things of the sort. . Insurance a Tax. There is nothing that comes closer home to the average citizen than tire insurance. In its last analysis it is a tax, and why tax collecting should be farmed out to private monopolies I fail to see. Every citizen in South Carolina contributes, directly or indi rectly, to these insurance companies. The landlord adids is to his rent, the merchant to the price of his goods, the fertilizer factory to the price of fertilizers, etc. The figures wvhich I give are all the more striking when it is taken into considlerationi that the ten-year period above covers the twvo largest fires in the history of the country-San Fran cisco andi laltimore. These tremen (ous profits are directly dlue to a monopoly created by legislative pro tection. The insurance laws of South Carolina .fostered and permitted this trust to live, in the face of tthe Con stitution of the State, wimich prohibits the formation of trusts. 1 saidl then, and I say now, that the Legislature (1i( right to (destroy it. In adiition to these profits, when you consider that the mnsurance com.. p~amles p~ay very large salaries--andl their agents onpenly stated before your legislative committee that it cost them forty-three per cent, to put the business in their oftices--the con clusion is irresistible that the people of -this country are paying unreason able rates of masurence and that it is the dluty .of the State of South Caro lina to give them relief. I know of no reason wvhy insurance companies should be exemp~t from the same kind of legislation which now regulates banks, rail road's, express, telegraph and telephone companies. We deline the limit and regulate the activities of evry corporation which affects the general public. Why not the mnsuraince companies? We fix rates of interest, regulate telephone, telegr.aph and railroad tolls; we for bid corporations to fix the price of products, restrain trade or destroy c'ompetition- .Why should an insur ance corporation be the only one im unme from competition andl not even be sup~ervisedl by the State in the making of rates? .In connection wvith this I will sub mit a bill wvhich wvill take the State wvarehouse onlice out of the powver of the insurance trust andl provide cheaper andl equally as safe insurance for the cotton on storage. State Insurance. If .vou wvii refer to the report of iAr. W. W. Bradley, State Auditor, and Mwr. Walton, an expert account ant who checked up the office of the State Wairehouse, you will see that they state that our insurance is safe and sound, and complimented its man agenment. They show in this report that we have paid out approximately one hundredl thousand (loll ars for in surance and that the losses (luring the two. and a half years have amounted to $1 197.00. This would have been sufflefen t, if carried as I suggested, to have paid all of the ex, penses of the State Warehouse Sys temi and left a surnins of naou soy enr a ,the'oh . gd edit tii nion t i la -ru it to to m te o wh h~ tuight- arise efre ;~s~ th eh ' latu ' the ;h money tobe e paide the prein cl are collected, teniwe could soon ay up a "reserve fund for Insurence And reduce therateso thazt the farmts; *of this State would get the benefit of a cheaper rate of lntfrance. If ,we have the same good fortune that has attended us for two and .one-half years, it~ wo,uld not be necessary ever to borrow a cent.- .Had this been done n the beginning the reserve "fund would now be suffieent to guarantee that the credit of the State would never have to. be used In any einer gency. The bill which I propose dos "not in the beginning ontemplate insur ing over one thousand bales in -any one location. If it becomes necessary to protect more than this number in any one location it can be done by our present reinsuranee facilities, which are amply sufficient. In Germany and Switzerland they have insurance by the government, white i other European countries it is regulated by law. The insurance rates In European countries generally in time of peace were on the average about one-twelfth of the rate being paid in South Carolin . Furthermore, the expense of writing this insurance is about two cents for every one hun dred dollars written. I suppose that the average rate paid the stock corn panies in South Carolina wvould be about $1.25 per one hundred dollars, while the expense of writing same is forty-three per cent, of the $1.25. These figures are a nightmare to the insurance companies in this country, who know that sooner or later the present methods will force State in surance or the organization of mutual companies where the rattes will be very much lower. The Federal Government early in the war, on account of the prohibitive marine risk, established a bureai of insurance, and it is very interesting to note what in one year it did for the Federal Government. The insur ance companies arbitrarily placed the rates at a prohibitive point and claimed that there was no profit in it for them. The Federal Government gave marine insurance, and in one year made ap refit of more than two million dollars. During that time it issued 1,539 policies, covering about $140,000,000.00, on American cargoes and ships carrying noncontraband goods. The figures of this bureau show that the gross premiums for in surance issuedl amounts to $2,904, 866.00, while the lossess wvere only $771,329.00, of which $58,811.00 was recovered in salvage. This government insurance was of inestimable benefit to the entire coun try, especially to the cotton of the South, by providing more reasonable insurance. Armed Piracy. The difference in the fire losses sinceat e passage of the Laney-Odom Act has been approximately fifty per cent. less than for any year previous to the passage of this act. You have doubtless seen the figures given by Insurance Commissioner McMaster showing the great. decrease in fire tosses smine the passage of the Laney Odom Act in the State at large. I Therewith submit the figures taken from the books of the Fire Depart ment in the City of Columbia show ing the oases each month (luring. 1915 to December 1, 1916, when this report was completed: Fire Loss. 1915 1916 Tanuary -. - $ 14017.04 $ 6,870.83 February -- -. 9191.05 4,076.03 March - - . . 84,680.46 7,361.05 A pril----..- - 10,653.25 6,793.55 May--- -- --12,599.20 582.10 June - - - - .. 8,773.25 - 731.83 July - - - .. . 8,177.11 41.80 August - .. .- 6,531.69 2,039.02 September -- 5,275.40 17,993.66 October. - .. - 754.85 126.50 Novmbe ... - * 10,052.77 *3,159.97 December ..- . . 5,301.95 . Total - - ...$176,014.02 $49,778.34 Extract from New York World, show ing a decrease in fire losses with no dlecrease in rates: *Ahout. "Realty is gaining in its fight 'against fire insurance tribute. ."On fire losses of $6,000,000 a year mthe mertopolitan district, the coi.. panics are collecting $30,000,000 in piremm The adlvisory council of rena estate interests announcedl yes terday that it woul call a conference soon to considler the entire subject. The T'fre Commissioner and represen tativ five insurance companies wvill be invited, incidentally also to con sider'-he problem of reducing expen ses for purchase and installation of sprinkler systems. 'At great cost five prevention methods have been adopted in build ings so that the per capita loss has decreased from $2.62 in 1911 to $1.94 in 1915,' said the council. 'There were 1,010 fewer fires in 1915 than in the previous year with aggregate losses of $2,400,0001 less and an aver age loss for eachi fire of $140 less than aniy previous recordl. Consequently it is but natural for property owners to expect lower rates where through the reconstruction of their real estate hioldings the fire risk is lessened.' "In the Bronx, Senator John J. Dunnigan completedl an investigation showing that on fire losses of $400, 000 (luring 1915, realty owners had paid $1,260,000 in premiums, i~e wrote to State Superintendent of In suranu. Jesse R.. Phillips yesterday that, the companies were violating Section 141 of the Insurance laws, providmig that the State Superintend ent of Insurafico has power to dec termine the reasonableness or unrea sonableness of rates and can order the removal .of unfair discrimination after the fact ha~s been, established at a hearing -"'There iscosiderable data in your department avania fo use.t ad nV :td ad itio al ,Ia Nrdaid it lys o ir that ownergswho paid fr the ad ebat in .thstr preniums.~ Ohairma A.: Warner' .the ensurance Contmi e of the -i Vianagers sso adition, re'red at ha monthly. meting t1 t: rtes on moth office bildings an '.rrtments ihould bb lowered at once. My conclusion~ are: 1st. There- are too many insurance igents in South Carolina for all to mke a living out "of the'business, lence the cost of 43 per cent.' for nurely placig business in the *oniled. 2nd. Taking the City of Columbia is -an example and: Mr. McMaster's igures, the great monthly loss be Eore th? passage of the Laney-Odom Act evidences that this law saved eire loss by thousanus. 3rd. That th frat . step toward sheaper rates -Is to prevent burning >f property in order to get the insusi mnee. The nancial distress of 1915 induc d incendiar fires- to collect insur ince, and so on as collusion between Fhe agent and the Insurer Is permit :ed to continue, the. companies will, Ay exorbitant rates, shift the loss irom the incendiary tothe Jonest cit zen who takes out a policy for real )re protection and not as an invest nent. As the busindas was -being conduct ad In South Carolina, it was not pro ;ection from fire by Insurance, but arnmed piracy on the part of both insurer and Insured. It offered a re vard to the gent to over-insure and :empted the property owner to arson, which was so common as to consti ~ute a menace to every town in South carolina. With the power offixing he rate and the valuation left en irely to the agent to increase his fees y giving the s roperty owner all of he nmsurance he could induce him to -ay for, there was practically noh tng between the public and the fire ug. In one night, betwveen midnight imed day, within a radius of a few locks, I heard five alarms of fire in mnoccupied houses during the hard imes of the winter of 1915. Government Must Protect Protiucers. The war after the present war will we a trade w ar, with the rest of the torld arayedt against North and south America, for the reason that he accumulated wealth of centuries n the balance of the world has been Iestroyed or driven to this hemis phere. Already we hear of proposi Aons m Congress to motiify the Lir man Act so as not to mae mi apply o combmations in restrair-t of ta.e wvhere it is for the development of roreign commerce. This undoubtedly means a further consolidation of nanu cturing industries, raiiroads )d public utilities. The formation of rusts will proceed on a scale' never <nown before, and through these, fav red classes weill pile up undreamed nealth to the prejudice of the aver pge man, Un aer present conditions vith all other interests consolidated nto trusts and fixing the price of pirodlucts, and with labor thoroughly >rganizedl, the producer. of raw mate rials wvill .be mercilessly plundered omless he is protected by the strong wrm of the State. Our whole scheme of national gov >rnment revolves around protection o banking, manufacturing and trans-, portation, It is only within fie past tour years that the national govern ment has become aroused at the con )euences of the neglect of agricul wure. What chance hve . the unor anized millions scattered through he rural districts against corporate rceed backede by expert financial strategy andI unlimited capital? Co peration is as easy in one case as it is impossible in the other; there rore, so long as present condlitions :ontinue all property must gravitate owardls the already rich, until by agi :ation andl education the farmers are Fmnally taught that their only relief is to go to the, ballot box and, b ssertm g themselves there, establis for their calling the princile of asso :iation, wvhich is now. only for the ravored classes. Trhis wvar will bring civilization to its climax; tremendous transitions are ipon us.. It is a terrible price to pay; ox nilhion iead,'. fourteen mil.lion hvo'nmded, mountains of dlebt, an in rmnite occan of human sorrow, with mighty nations vanishing like sunset shadowvs and fruitful fields given over o graves, but humanity is ever born into higher cycles of existence :hrough terror, blood and (death. The mationsi engaged in this war will conme yut of it with new visions of service hat should be performed through ~overnment for the indlividlual. The food 'supplyr hos been talcen sharge, of and prices regulated. Tlhe, State is purchasing the raw material rnd other necessities and turning it >ver to private corrporations to be manufactured, the price at which it nay be sold to the public as well as :he rate' of wages being fixed In ad ranice. This function bf government will be firmly established in Europe when the war ends. What of this republic where we lave a more numerous cfass of very vegithy persons than in anyA other lation on the fact of the globe? This ~oncentration of tremendous wvealth n the hands'of the few constitutes >ur greatest danger. Incomd Inherit ince taxes qnd other things of that <mnd wvill never solve the problem. It nust be done by leaving more money a +he hands of the producerh, and ,us have our wealth more evenly die ributed. The war has already great y increased concentrated 'wealth, as s shown by 'the following headlines >ver a Now York press disjiatoh: New York, August10. 'Morgan Doubles Wealth. of. Father. --Fromn th.a 0uhi Two Years- as the .l4 P .Did inIHis Whoke C a4~ A.Wall ~reax'~ ~A~w ~rej1- he a o t tl 8 ndl) tI yr oapt ofialist aip tc fn- the., r of their rapidly accuaulated fo,ues wilt.be out of .brie ti at tion that is radically domerate in its' chaiaete,. f The snanner in wheh th sigthour law a passed .shook-. ed.and alrmed The' attitude of the FederA -admii;atilprssho is that..it redogkises tliat the tihe has come when the law making power ..must open'ly and effectively concern itself eith industrial, coiriercial and ofian eial- questions upon large lines. Gov ernments must.deal justly and strong ly not only with the labor problem, but. with the profits to the farmers of this country. Half. measures and sickly palliatives only irritate and make matters worse. It is better to have.effective measures or: nothing at all. It should have a strong, effect ive warehouse law. or repeal the act. Ever since the passage of the State Warehouse law certain interests in this State have been angry and re sentful to see the' State -of South Carolina openly and avowedly inter fere in grading, warehousing, selling cotton, fixing interest and insurance rates, with the declared purpose of aiding the individuals engaged in production. It . came as a radical in novation, a novelty in the legislative field.- It was not so much what the feeble act itself could accomplish as the threat contained in the strong declaration of a broad purpose to aid the individual farmer. The government from its very foundation has aided other individuals and classes, as every well informed man knows. I have been in close touch with public affairs for more than the executive, legislative and judicial functions in both State and nation. have been systematicall prostituted to the service of the rich men and corporations. This has been (lone within the law and outside of it. It has , been done in defiance of the Constitution and against the plain rights of the people at large, but yet it has established no precedent which can be used to the advantage of the masses, because it has always been (lone under false pretense. No mat ter how flagrant the violation of the spirit of our institutions, the act it self, hether protective tariff, railroad subsides, land grants, insurance or banking, have always been clothed in the garb of seeming legality and sent forth to do its work under a consti tutional mantle. There is no states man or philanthropist who does not recognize that this country must fail as a republican commonwealth unless there be material changes in com mercial, financial and industrial cus toms no so solidly entrenched in our social order. The great financiers practically own the press of the country, and thoy are ever at ork creating senti m t in favor of their masters and against every man ho seriously at tempts to change the existing order. These newspapers fail to realize, or else wilfully ignore, the fact that the true reformer has no fight against capital per se; he is simply demand ing that the powers of the govern-s, ment be given to aid the average man to equal opportunity. In the past the entire governmental' power has been devoted to the development and pro tection of big..business. There m-iustf be room for little business and the little man to win as well as for Big Business and Big Man. .Only an anarchist would crush bus mess of any kind, either big or littie but the time has come when :'ot alf of the attention of government can be given to the, interests which need it least. In this connection Mr. WV. W. Bradley and myself have prepared a rural credit bill to enable State banks~ to loan money on long time upon ag ricultural lands, whicni will a ure sented for your considerationi; 'to. gether with a grader's insurance bill. -Resignation. In conclusion, I herewith tender. resignation, to atko cdect Upon th election of my successor. The 'spirit of intolerance in the biU ter' factional contests in South Caro lina makes the further dlevelopment of the system by me impracticable. I have had no personal or p)oliticatl axe to grind. I followved the course which it seemed to me would best i sure the development of the Ware house System upon broad lines of service to the farmers of this State. I have no political apologies to make, and the mere fact, of being in a minor ity is no proof that I as wrong. Thf Governor and this Legislature were elected pledged to the development of the Warehouse System, and although my term dloes not expire until No vemnber 5, 1918, after the positive standl I took in the campaign, I feef that I should not embarrass the del velopment of the system, and thatJ owe it to a majority of this Legial ture and Governor Manning to give thenm a free hand. . I believe that all of us wvish to ho our best for South Carolina, and I stand ready to aid my successor free of cost whenever called upon. I wish you to understandl, gentle men of the General - Assembly,d the people ,of th State to believe, th I have never desired an office for sol aggrandizement, but only as a mean of being real service to'nmy State. I do not propose to permit factiona prejudice against me to pervert the usefulness of this ofmee. - I feel tha the best service.- I can render is leave the way open for those in trol to further develop a sy which was the salvation of the a farmer ithout personal credit in and which -will be greatly neede less I misread the signs next r'ho oflie'has been thoroughly ed by Messrs. Bradley and and I herewith submit as' an app i portion of their report, wi not enly thorough,s but just t state arid fai' to me. Respectfully, JNO.' LOWNDlES -McLAUI