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IKING Pill OF FINANCE i COTTON BASIS OF FOREIGN EXCHANGE REGULATION. Europe Pays Big Price for Cotton; But Most of"the Profit is Raked off by Exchange Manipulation?Fanners Could I*rotect Themselves if They Would Go at the Matter in the Right Way. I The following letter from Hon. John L. McLaurin of Bennettsville, addressed to Hon. Mack King of Anderson, under date of September 11 contains late information in connec tion with the financing' of cotton tnai is Worth while: Yours quoting from a speech I made in Anderson in 1916 as follows: "Cotton went down first, it will be | the last to rise and remain up Ion-1 ger than any other commodity." You ask my opinion-' now. It is the same as then expressed. In 1916 "price fixing" was unknown, as well as the threats by war industries board. In j the long run government authority j cannot permanently overturn natural economic law. Ultimately the price of cotton will be fixed by the volume of money in circulation and the supply and demand for cotton. As to whether or not the farmer will get the benefit sure to come from the unrestricted operation of these laws depends ^ upon his intelligence and the means at his disposal to carry his cotton during the period of readjustment j w_ o??_ t*qQQtncr T honp ! that the cotton association under the able leadership of Mr. Wannamaker will help us. It is a complicated situation with which we are confronted. King Cotton. The south has a natural monopoly / in the production of cotton. Some day j we will comprehend and utilize it,: when we do. our section *will be a dominating figure in world finance, j Up to 1914, our cotton crop was | the main factor in the nations bal- j ance of foreign trade, but it never' did the south much good er.cept in-1 directly. When war was declared the j t throne was usurped by war material and food. The present situation is, a struggle by king cotton to regain ( his lost throne. The price of cotton is' largely a matter of utilizing credits, j Up to the state warehouse development cotton was a good basis of: credit in everybody's hands except i the man who grew it. Now it is a J mer, then anyone else. This is a splen.j did basis from which to work. It isi not generally knowa, but in section' 13 of the Federal Reserve act, the farmer can discount rent notes and. crop, mortgages as well as actual cot-1 ton. We lack the proper machinery i to use these securities to pay the ex-j pense of the coming crop. If we did | r this, it would lighten the load on the; actual cotton in the spring. Direct Sales. j I am more firmly convinced than ever in my life, that the development of a statewarehouse system in every cotton state is the only effective solution of the problem. It was a great b|^^step to go as far as we did in enabt ling the farmer to hold his cotton, w|Wborrdw money and pay his debts, but ^^ after all cotton Is made to sell and ^^not to store. The middlemen are get-j ting too much of the profits. In this country they make as high as $50 per ) bale profit on long staple. It doesn't: matter where price goes under) the present system, the middlemen' get more clear profit from handling the cotton than the farmer does from growing it. I hoped to add the direct sales to state warehouse but I could not move one step without state insurance on stored cotton and a bank in connection with the system; those interested in making money, out of! existing conditions h?id sufficient political newer to nrevent me from set ting the legislation that I needed. l| refused to remain commissioner merely to store cotton and finance it. What Might Hare Been. Let us suppose, I could have secured this legislation, what could be done today. 1 \ > The world is clamoring for raw cot-> ton. There are plenty of ships to car-' ry it abroad, the only difficulty is that Europe is unable to pay and, lacks the credit. There is no machit).-, ery through which this credit can bej extended. The rote of foreign exchange is J prohibited. Gold for exchange has, practically ceased to move from this, country for commercial purposes. We! are being throttled by the available! gold of the world being dumped upon us for war materials. The proud j sterling is normally $38.65. It is now around- $4.20. This means that if an j English mill purchases $100,000; worth of cotton the discount would j he shout JIK.000. Tf it was a Ger-! man merchant the discount would be! 75 per cent, because the mark now sells in New York for 5 cents. This foreign exchange rate is based upon the principle of the cancellation of indebtedness. Trade balances and exports are not paid in gold, but the J money of the creditor country is ad-j justed to the currency of the debtor country. The only remedy for present conditions is for European coun-1 tries to increase their exports to us. j How can they do this unleRs they| con get ra .'material with which to manufacture their goods? I How can they get raw material unless we extend credit? Euro pP is bankrupt unless we extend aid. If we make eleven million hales of cotton and carry over four million wp will have a surplus of six million bales at the lowest calculation. No matter flr what was the price of cotton Europe could not buy except on credit. Foreign Exchange. The foreign exchange rate is a mere barometer. If you want proof, in 1915 the London rate went to 54.45 and England could not hnv war /munition nor food until our govern' meirt deposited a large amount of gold with Canadian banks and our rich men bought American securities held abroad. Even this did not suffice and large loans were made by this country to the Allfe?. It is a significant fact that the amount of the loans t0 England and France were practically the same as the exports sold them, so that you can see that Europe can only buy when she sells to us or borrows from us. Now If South Carolina had such a state warehouse system as I hoped to be able to have in readiness when the war ended, we could extend credits to European nations and sell them the entire South Carolina crop, getting pay as the cotton was turned into goods. If you were to cut the discount rate on the German mark in j half cotton would bring 50 cents per pound today. The only way that we would ever sell it is on credit, so why not get the benefit of the transaction for South Carolina instead of allowing it to be pocketed by New York fianciers. No one need to tell nie that the exchange rates quoted in London and New York are holding j goods against the "insiders." Mr. Harding understaiids this and for that reason proposed the one hundred million dollar export corporation which Mr. Wunnamaker is trying to organize under the Webb act. It would be unnecessary to tie up this tremendous amount of money if the state of South Carolina could act. If cotton was a North Dakota crop, the industrial commission would extend a European credit through the bank of North Dakota and the crop of this state could be placed immediately at from 40 to 50 cents per pound. There is too much lost motion in a voluntary organization with millions of members and a European government only knows how to deal with another government. They could understand the state of Soutli Carolina, when they don't know what to make of a cotton association. Remember that cotton is an export crop, and that the portion exported fixes th6 price of that which enters into domesic consumption. If the state warehouse commissioner would negotiate direct with the German government for the sale of one hundred thousand bales of American cotton it would have a tremendous effect on the price of cotton in the United States. In all export crops the price of the exported cotton determines the price of that which enters into domestic consumption. The quickest way to raise the price of cotton is for someone connected with the state warehouse system to go to Europe and negotiate with some government there for the sale of South Carolina cotton, securing us from loss by proper guarantees. There is nothing to do except to wait until credits are extended to Europe and South Carolina can extend these credits herself and at less expense than through Wall Street. I strongly suspect that the present stagnations and the general slump in prices is manipulated from Washington so as to force the ratifcation of the peace treaty. The H. C. L. There is something sinister in the talk about lowering prices and raising wages at the same time. It is all right to say "living must be cheapened" but at whose expense? Is the relief to consumers to be entirely at the expense of producers? The farmer feeds the hungry and clothes the naked and yet, in the past 10 years home owned farms have increased only 1 per cent, and tenant farms 20 per cent, while the population in rural districts increased 20 per cent., the town population has increased 100 per cent; you can't rent a house in this town because of the exodus from the country. The way to check this evil is to increase the profits on the farms and. make the living in the cities more difficult. You cannot expect or compell the farmers to continue to feed and clothe at less than cost an ever increasing town population. Cotton Seed. The molt complete and urijust monopoly in this country is in cotton seed and fertilizers. It is hard to corner cctton because of its world wide use end the vast size of the crop; but Armour and Swift who are better known as meat packers, with their associates have absolute control of the oil mills and fertilizer plants in this country. They often hire men not for their real value but to prevent competition in the purchase of seed or the sale of fertilizers. The recent so called cotton seeed conference in Columbia is a sample of the boldness with which they are seeking t0 destroy competitive market. If the farmers do not organize intelligently they will be steadily pushed to the wall. This trust intends to name the price the farmer is to get for his seed and then sell him his meal and fertilizer at the price which the trust will also name. Your6 truly, John L. McLaurin. o IMPROVED ROADS IN QUEBEC In Five Years Government 8pent $15,774,369 for Development and Improvement. The development of good roads In Quebec Is a subject at present mnch discussed from one end of the prov Ince To the other. In the five years from 1911 to 1916 the Quebec g?vernmenf ?f>ent ?15,774,36? for good roads. The- following figures show the nuim her fit miles of roods- systematically mstetelaed hjr the rouafcC*p?HUe? of Quebec, with the aid of subsidies from the government of the provinces: In 11907, 1,000 miles; In 1900; 2,000 miles; In 1911, 8.500 miles; In 1913, 15,000 ! miles; In 1916, 18,000 miles. Since 1911 more than 1,214 miles of macadam and 497 miles of gravel roeda have been made In Quebec. Benefits of Good Roads. Good roads bring nutomoblllsta. Thov snpnH mnnpv Good roads bring trade ?nd increase property values. They uttract homeseekers und Industries. I Do Not Build Roads. Large appropriations and paper ' plans for highway development do not build roads. , 1 ! tft mppt onnn rnans bonds .W .I..? . ] Motor-Vehicle Revenues Devoted to ' Maintenance and Repair of State 3 Improved Highways. (Prepared by the United States Depart- j ment of Agriculture.) ( In most states the motor-vehicle ' revenues are devoted to the mainte- J nance and repair of the state roads or other Improved highway*. These 1 states thus seem to have solved fairly well the knottj^ problem of how to secure sufficient funds to maintain the more Important roads under the ever- 'j Increasing traffic requirements. As \ both the traffic aflM the revenues increase with the nimiber of cars, there ellsts a possibility of so adjusting the , registration rates as to keep pace with the ever-growing maintenance charges. Recently, however, a movement to capitalize the motor-vehicle revenues and devote these funds to road con!>: 4 M Ifefclft.r-- ri' * -V Good Roads Mean Greater Rural Comfort and Prosperity. 8trnctlon has been quite noticeable. This Is especially true in those states which have a comparatively large number of cars and only a small mile- | age of improved roads. Thus, Illinois, i last November approved a bond Issue 1 of $60,000,000 for the construction of a j system- of state roads. The Interest j and .principal of these bonds are to be paid entirely from the motor-vehicle revenues. There is no donbt that these j ?"II ?tMc I revenues win piu?c guiunnn ?vi . purpose. The main question which re- j mains is whether or not a satisfactory source tof maintenance revenues can be secured so as to prevent these roads, when constructed, from deteriorating. EARTH ROADS IN , CONDITION ? ? Drainage If Chief Eaafntlal In Putting 1 Earth Roads In Proper ShapeDrag Must te Used. It can be truthfully said that drainage is the chief essential in putting earth roads into proper condition. An old Scotchman, an expert road builder, aptly said that the three requirements of good earth roads are, drainage, more [ drainage, and still more drainage. E. W. Lehmann of the University of MW-'j sourl college of agriculture Indorses this sentiment and ad^a: Roads mast not only have good surface drainage but must also have good underdraln-1 age. Surface drainage 16 secured by proper grading, adequate side ditches, and by keeping the crown of the road , properly dragged. Stretches of road that do not dry out quickly must be underdralned by tile. The drag' must be used after each rain, If the best results are to be se-' cured. Don't go on the road while too | muddy, let it dry out slightly; it should I be wet enough, however, so It will not J ( rumble, but smear. When properly' used, the drag brings a thin luyer of j earth toward the center of the road j which Is rolled and- packed between wet periods. If too much crown is secured by dragging, the angle of the drag should be reversed. Getting the earth "-oatis graded, d tches open, well drained, and properly crowned by dragging Is about all that can be done until the people are riwirlir tn stirfnrp tho road with gTSVel. broken stone or some other surfacing I material. GREAT ROAD WORK PLANNED Approximately $300,000,000 for Highway Expenditures to Be Used Thie Season. Estimates of contemplated b^hway expenditure* In the United. S trues for the- season of 1019 place the total at approximately $300,000,000. Because of governmental restrictions the 1 amount was considerably lower than thtain.1918, while in 191? it was placed! at $280,000,000. Concrete Road Building. A great era of concrete road building has begun. Comprehensive sys-1 terns are being constructed in rnanj1 counties and many through highway!1 are being Improved with concrete in1 various states under state supervision J Discomforts of Poor Roads. If ppople don't invest In pood roads 1 they Invest in getting stuck in tb? mud, tr.ore horsepower for hauling more time spent on the road, anc much discomfort when they ride. i " i | t VALBAXERA POUND AT BOTTOM OF SEA. Wrecked Spanish Steamer Fully Identified. ITotr U'oot FIQ Qont ^1? for the 400 passengers and 88 members of the crew of the Spanish passenger steamer Valbanera, lost off Rebecca shoals light, 40 miles from here, in the recent gulf hurricane, continued today without results. Cuban Consul Millford, who directed the work of the divers who identified the sunken hulk as that of the Valbanera, today wired a complete report of his investigations to officials of the Penellis, which owned the steamer. Consul Millford. also asked for additional instructions as to the employment of divers to search the wreck thoroughly for the bodies. Pending receipt of a reply it is not expected that any further steps to investigate the wreck will be made. All vessels in these waters are keeping a lookout for traces of the survivors. Washington, Sept. .21?Rear Admiral Decker, commander of the Seventh Naval district, with headquarters at Key West, today reported to the navy department examination of the wrecked steamer off Rebecca shoals light neat Key West had established beyond a doubt that she was the Spanish passenger steamer Valbanera. Admiral Decker in his report said that examination of the steamer's iavits by drivers indicated that no sffort was made to lower the port boats. In that case*with a passenger list of 4p0 and 88 members of the crew, it would appear that many of those on board went down with' the BIGAU1 Are you go - Dillon Race fastest drivi l * with their s , f first time a ! . TTV 1 ? ? 1 I in union. . / ^ % ' MY SE( Mules For W7// Arrive They are i where. If you are a it will pa , buy. ! Prices an< I also ha' Buggies ai . Also a n thing that R. 9 % vessel. ' , v Admiral Decker reported, however, t that there were no bodies or wreck- t age in the vicinity when the wreck was discovered by submarine chasers. Radio records at Key West, Admir- j; al Decker said, show that the 1.15 p. c m. on September 12 the Valbanera s called Key West and asked if the ^ station had any messages for her. 9 Ten minutes later the Key West sta- - ticn called the steamer but go no response. The hurricane was raging r i , v NOT] I Masonic Meeting ! I 3t 3 1 I Masonic Lodge No. 7, I a Lodge of Sorrow on P. M. at old school < body invited. All M meet at Lodge room c er and other promine with us. -o- -o E. C. STAN' 0 RACES 1 ling to the big Aut Track this afteri ers in this State w special racing cars, race of this kind ha: Ton can't afford to ; ' .<;> ? / I ..T v? ?> :OND CAR LO> i and H This Sea: Monday, Sepi as good as can be be in need of Mules o y you to see me t 1 terms right. ve a nice stock cf id Harness, ice line of Robes, you need in this 1 H. Wigg Little Rock, S. C. % i / \ rith considerable violence at ttttl ime and it is considered likely Hut he ship sank within a few mimnlrs. -v.. , o NOTICE. I s. tly forbid anybody from hkrng my two boys, Tom and Huraey !armichael, minors, without my co?ent. If they violate this notice tAey rill be dealt with according to tsnr. -18-3tp. Francis Carmickaxl. Subscribe to the Dillon Herald- f2 >er year in advance. 9???????????????O??0??<? ? [CE. I Sunday, Oct. 5th % ?M. I 'I " 7 A. F. M. will hold 11 Sunday, Oct. 5 at 3 !; auditorium. ' Every- j j Masons requested to ! j it 2:30.s Gov. Coop- \ [ nt speakers will be ]; -o- -oFON, Secy. j TARAVI ."? 1UIM1 ' ' , $ o Races at * i noon? The ill be there This is the 5 ever been miss it. j VD OF I / W.\r K i*-i > 1 torses son the 29th. t \ i ught anyir Horses / lefore you Hackney M. and any me. , I inC 1 >IAI? I t / . > ,u