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1914

SALLY DOUBLE

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Then he buried his face in his hands and groaned in anguish, “Oh, what can I do? What can I say to the Sultan ?”

Since the dawn of Philippine history the Moro pirates have raided the towns of the Christian Filipinos and carried their wives and daughters off into slavery, torture, and spoliation. Politicians talk of Philippine unity, and of one legislature for all Filipinos, but the Macabebes know better than that. They would give the Mohammedan dogs laws of

lead that they could understand. The Spanish friars conquered all of South America and seven million pagan Filipinos, but in three centuries of unremitting labor they never made a dent in Moro solidarity. The American soldiers have been fighting, persuading, educating, in Moroland for almost a decade and a half, but the sentinels must still keep watch for juramentados in Jolo ; the fighting still goes on in the hinterland, and the pirates of Tawi Tawi are still unsubdued.

SALLY DOUBLE

A SERMON FOR CHILDREN

BY THE REV. HENRY S. COFFIN

"He is beside himself." - Mark iii. 21.

AVE you ever met Sally Double ?

No, she isn't a twin, although you

might think so from her name ; but there are two Sallys. When you meet Sally, you have a strange feeling that there is another Sally around the corner listening to the conversation ; and the other Sally is always a great deal more interested in what Sally is saying to you than in what you are saying to Sally:

Sally is bright, and very entertaining. One of her mother's friends remarked the other day : “ Sally Double is one of the cleverest girls I know; but what a pity it is that she knows it !" How do you suppose that Sally found out that she was clever ? It was that second Sally, whom we never see, who eavesdropped on the Sally we know, and whispered to her : " Sally, you're a wonder !"

Whenever Sally does anything, she appears to think that somebody is looking at her. She is really looking at herself. She divides herself, and puts a Sally Number Two in the audience to watch Sally Number One ; and sometimes you think you can hear very loud hand-clapping. That's Number Two applauding Number One; Sally is very pleased with herself.

Sally doesn't have a very good time when she plays; she doesn't put her whole heart into the game, she keeps wondering whether she is enjoying herself or not. Some of her feelings are always busy feeling how the rest of her feelings feel ; so she does not feel all the pleasure other boys and girls get out of the game.

She is a pretty girl, but you do not find her as attractive as you think she ought to be. She takes a long look at herself in the glass

before she leaves her room in the morning, and, although she is far away from the mirror now, she has not forgotten what she saw there. People who think about their looks always spoil them.

I overheard a lady say that Sally was self-conscious. Her little brother told her that she was stuck on herself. The glue must be the “Vanity Brand," I think, and Sally is a good advertisement for its ability to stick tight, for she never becomes unstuck. She is fastened to herself all the time.

One of her small brother's friends remarked that he did not think that she had a great deal to be stuck on. And he was quite right. Nobody has a very large self who thinks about himself, You know how the Bible describes an idiot ; it says, " He is beside himself." We say, “ He isn't himself.” Sally Double is seldom herself ; she is " beside herself." It is not surprising that she does not do as well as she might; only half of her tries to do it, the other half looks on.

If only all that is in Sally Number Two could be kept in Sally Number One!

How often the Bible tells us that Jesus made people “ whole”! God does not want fractions but units, whole men and women, boys and girls. And the way Jesus made people " whole" was to tell them of their Father who watches them, thinks of them, loves them. They need never look at themselves, because God's eyes are on them. They need never applaud themselves ; God will give them all the praise they ought to have. No one needs to be beside himself, because God is always beside everyone

of us.

A WEEKLY ARTICLE BY THEODORE H. PRICE

THE COTTON SURPLUS AND THE U. S. TREASURY

HOW THE PROBLEM HAS BEEN SOLVED

F

enormous

VOR the second time in the history of

the United States the cotton crop has

become a politico-economic issue of the first magnitude. The Southern monopoly of cotton production and the belief that it could not be maintained without slavery led to secession and the war of the Confederacy. To-day it is a National question as to whether the Governnient should or should not do anything that will directly or indirectly sustain the price of cotton until the almost entirely arrested export demand for the article revives. Most people realize the importance of the subject, but are without an accurate knowledge of the facts in regard to it.

The twelve so-called Cotton States now produce annually about fifteen million bales of cotton, which, with the by-products derived from cottonseed, are worth about one billion dollars. About forty per cent of this production is consumed in the United States,

and the remainder has hitherto been exported. Cotton is peculiar in that it is the only crop of importance all of which is sold by those who produce it. Only seventeen per cent of the corn crop, for instance, “ leaves the farms;” the balance is consumed or fed to stock by those who produce it. Cotton, therefore, generates directly an commerce and provides a medium of exchange that almost entirely takes the place of gold in the settlement of our inter-State and international balances. The late William B. Dana, for many years editor of the “ Commercial and Financial Chronicle,” once said that cotton, being practically imperishable and always convertible, possessed more of the attributes of a legal tender than anything produced by human labor except gold. That it does take the place of gold in the settlement of American indebtedness to Europe is shown by the following summary of our entire foreign trade for the past five years.

UNITED STATES EXPORTS AND IMPORTS

Fiscal

year ending June 30. 1914 1913 1912 1911 1910

Net
Merchandise Merchandise Balance in value gold and silver.
Imported.

Exported. favor U. S. Imported. Exported.
$1,893,925,657 $2,364,579,145 $470,653,491

$70,138,289 1,813,008,234 2,465,884,149 652.875,915

38,914,392
1,653,264,934 2,204,322,409 551,057,475

26.232,294
1,527,226,105 2,049,320,199 522,094,094 $32,284,651
1,556,947,430 1,744,984,720 188,037,290

85,292,977

Total net balance in

favor U.S. $540,791,780 691,790,307 577,289,769 489,809,443 273,330,367

Total $8,444,372,360 $10,829,090,625 $2,384,718.265

$183,293,301 Net $2,573,011,666

Average 1,688,874,472 2,165,818,125 476,943,653

37,658,660

514,602,333 Total value raw cotton exported

$2,759,447,880 Average value raw cotion ex ported.

551,889,576 NOTE.- During the fiscal year ending June 30, 1911, total exports included the following classes of materials, the value of which was in excess of $50,000,000: Cotton (including manufactured cotton goods valued at $28,844,627), $639,319,928 ; wheat and wheat flour, $142,407,631 ; cattle, meat, and dairy products, $132,926,979; iron and steel-manufactures of, $106,559,621; copper-manufactures of, $144,895,519 ; oils, $144,708,447; tobacco and manufactures of, $60,445,440 ; wood manufactures,timber and lumber, $66,953,878; coal, $59,921,013. Total, $1,498,138,456.

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2. That during the same five

securities held for investment and by the years the trade balance in favor

maturity of many short-time American obligaof the United States (including

tions owned abroad and now due or shortly gold and silver) aggregates...... $2,573,011,666

to become due. and that during the same period the total value of raw cotton ex

The amount already owing and unpaid to ported was..

2,759,447,880

Europe on account of the indebtedness thus 3. That for the past five years

arising is estimated at about $300,000,000, the average annual balance of

and our Stock Exchanges are being kept trade in favor of the United

closed that Europe may be estopped from States (including gold and silver)

increasing this debt by further resales in the has been....

514,602,333 United States of the $4,000,000,000 of Ameriand that the average value of the

can securities assumed to be still held abroad. raw cotton exported has been... 551,889,576

They are the only securities left for which The sequence of these state

there is a possible market, and the war need ments will make it plain that

of gold is so great that their resale at very our annual payments in mer

low prices is altogether likely if the markets chandise, gold, and silver to for

are reopened. eign countries exceed their pay

In that case we should either have to ments to us in kind by..... $514,602,333 denude ourselves entirely of gold in order to and that since the value of our cotton exports pay, or declare a moratorium in regard to exceeds this sum it is accurate to say that foreign debts, as most other countries have "our debts are paid in cotton.”

done. If, however, Europe can be prevented These who have studied the sub

from increasing the amount of American inject closely estimate that this

debtedness upon which she is entitled to annual balance in our favor os,

demand immediate payment, it is not impossay ....

$500,000,000 sible that her need of food will compel her is applied to the liquidation of the

acceptance of our cereal crops at prices following debits:

which will liquidate a substantial portion of Interest at five per cent

the amount now due, and that later on the ina principal of $4,000,

balance due or to become due can be paid in 000,000, being the nor

cotton, which, next to wheat and corn, is the mal value of American stocks, bonds, and

commodity that she will be the most in need

of. other evidences of

If, however, in the interval, as a result American debt held

of the congestion in the cotton market, the abroad....... -$200,000,000

value of that article, as measured in terms of Spent in Europe an.

gold, shall be cut in half, it is perfectly evinually by Americans

dent that our debt-paying power would be resident or traveling

reduced by fifty per cent, and our National abroad..... 100,000,000

solvency to that extent impaired. Remitted out of their

It is plain, therefore, that the price of cotearnings by Europeans

ton is a matter of concern to the Nation at resident in America. . 100,000,000 Insurance and freights 100,000,000 $500,000,000

large as well as to those who are engaged in

its production or manufacture, and it was in These figures are of course conjectural, view of the broader and National importance but it is evident that, if any of the items of the question that the Secretary of the are underestimated, American indebtedness Treasury called into conference with him at abroad unpaid must be increased by the Washington, August 24, one hundred repreamount of such underestimate, for our pay- sentative Northern and Southern business ments cannot exceed the net balance of trade men who, as producers, manufacturers, in our favor, known and ascertained to be merchants, or bankers, were presumed to be about $500,000,000 a year.

qualified to advise upon the subject. In the present situation it is undoubtedly As the Southern men present were in nutrue that our accrued indebtedness payable merical preponderance, it was agreed that abroad is largely in excess of the amount tobacco and naval stores should also be connormally due in current account, for it has sidered, it being evident that any serious been enormously increased by European impairment in their value would jeopardize resales in the United States of American the financial strength of the section where the

cotton is produced and upon which the burden of maintaining its price would chiefly fall.

The Secretary of the Treasury presided at the conference, and the entire Federal Reserve Board, as well as the PostmasterGeneral and the Secretary of Agriculture, were in attendance most of the time.

The problem before the gathering was how to avoid any unnecessary impairment of our debt-paying power as a Nation and the financial prostration of the South without involving the Government in an effort to support the price of any commodity by purchase, guarantee, or valorization,” which is the word that was coined to describe the futile attempt of Brazil to support the price of coffee by buying up the surplus supply.

At first there was a somewhat clamorous demand that the United States should buy up and hold the prospective excess of the cotton crop, but Mr. McAdoo promptly made it clear that no such proposition would be entertained, and thereafter the discussion was confined to devising methods which would enable the South to help itself, and so help the Nation.

After a two days' session of the Conference, the Secretary of the Treasury made an announcement reading in part as follows:

Among the eligible securities to be used as a basis for the issue of currency I have decided to accept from National banks, through their respective National Currency Associations, notes, secured by warehouse receipts, for cotton or tobacco, and having not more than four months to run, at seventy-five per cent of their face value.

In this statement Mr. McAdoo expressed the opinion that

This plan ought to enable the farmers to pick and market the cotton crop if the bankers, merchants, and cotton manufacturers will cooperate with each other and with the farmers, and will avail of the relief offered by the Treasury within reasonable limits.

The Secretary's announcement that he would accept warehouse receipts for cotton and tobacco as a basis for the issuance of emergency currency was followed by the publication of the report of a committee of Northern and Southern men appointed by him from among those present at the conference.

On this Committee the producers and manufacturers of cotton and tobacco were represented as well as the bankers, mer

chants, railways, and warehousemen who finance and handle these two great staples.

Mr. W. P. G. Harding, of the Federal Reserve Board, and Messrs. Brand and Carver, of the Agricultural Department, were designated to act in advisory co-operation with the Committee on behalf of the Treasury Department.

The report of this Committee, which was signed by Royal A. Ferris, of Texas; S. T. Morgan, of Virginia ; W. B. Thompson, of Louisiana ; J. 0. Thompson, of Alabama ; D. Y. Cooper, of North Carolina ; Lewis W. Parker and R. G. Rhett, of South Carolina ; G. Gunby Jordan, of Georgia ; Wm. Elliott and B. L. Mallory, of Tennessee; F. G. Ewing, of Kentucky ; Richard H. Edmonds, of Maryland, and Henry Walters and Theodore H. Price, of New York, contained among others the following important recommendations :

That it is the sense of the Committee that cotton, tobacco, and naval stores should be marketed as deliberately as possible until they can again be exported in normal quantity, and that when properly conditioned should be warehoused with responsible concerns, that they should be protected against weather damage, and be properly insured against loss or damage by fire.

That warehouse receipts for these commodities are proper collateral for loans by banks, and should be so accepted, with such limitations as to margin, inspection, and valua. tion as conservative bankers may each in their discretion see fit to impose.

That the average market value of middling cotton for the past six years has been in excess of 12 cents per pound, that the Committee is informed that the cost of producing cotton averages throughout the United States about 972 cents a pound, that it is a rule of economics that the production of staple commodities will decrease if they continue unsalable at less than the cost of production plus a reasonable profit. That cotton does not deteriorate when properly warehoused, and is as good twenty years after it is picked as when it is first gathered ; that it can therefore be carried over until the restora. tion of normal business conditions enables the world's consumption to absorb it. The Committee is therefore of the opinion that every effort should be made to assist the producers to hold their cotton for a price that will minimize their loss as far as possible until such time as the channels of foreign trade shall be reopened. That loans upon cotton made upon a basis of 8 cents per pound for middling, less such margin as the lender shall consider necessary, will afford reasonable protection to bankers, and will greatly facilitate the financing of our most

a

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important export crop in the present emer- recently. Under its provisions banks collecgency.

tively organized, as described in Mr. McAdoo's That in suggesting 8 cents per pound for statement, may issue their own notes guaranmiddling cotton as a basis for loans, it is not

teed by the United States to an amount equal the purpose of the Committee to convey the idea

to one hundred and twenty-five per cent of that that figure represents, in their opinion, the intrinsic value of cotton, but that it is sufficient,

their capital and surplus. As security for in their judgment, to meet the requirements

these notes there must be deposited at of the situation and enable the farmer to Washington bonds or “other securities” or market his cotton in an orderly and deliberate commercial paper which the Secretary of the manner.

Treasury may accept at notexceeding seventyYour Committee recommends that notes five per cent of their face value. Of the having not longer than four months to run, circulation so issued not more than thirty per when secured by proper warehouse receipts for

cent may be based upon commercial paper ; the aforesaid commodities, properly insured, be

the balance must be against “bonds or other accepted for rediscount by the Federal Reserve

securities.' Banks, when organized, and that they also be

The banks of the South have but few approved by the National Currency Associations as security for additional circulation to

* bonds or other securities.” Their assets the National banks under the provisions of the

consist chiefly of commercial paper or loans Aldrich-Vreeland Act, as amended by the Fed- against merchandise. It follows, therefore, eral Reserve Act.

that a Northern bank having the necessary

securities could take out circulation equal to The quoted portions of Mr. McAdoo's one hundred and twenty-five per cent of its announcement and his Committee's report capital and surplus, but that most Southern indicate the essential elements of the unique banks could procure circulation equal only expedient devised to meet an unprecedented to thirty per cent of their capital and situation.

surplus. The report of the Committee appointed by The decision of Secretary McAdoo to Secretary McAdoo is in effect a declaration accept warehouse receipts for cotton and of experts that loans properly margined, tobacco as “ other securities ” will enable a secured by cotton valued at 8 cents per Southern bank which is a member of a Napound, basis middling, are reasonably safe, tional Currency Association to increase its and taken in conjunction with the Treasury circulation by one hundred and twenty-five announcement may be considered as suggest- per cent of its capital and surplus; and though ing that the currency issued against cotton this currency cannot be counted as part of its warehouse receipts will be secured by cotton legal reserve, it can be reckoned as reserve at 8 cents per pound, less the customary by most State banks, and is by common banker's margin and the further deduction of consent, though not legally, available for the twenty-five per cent required by the Treasury payinent of all private debts. under the law.

There is in certain sections of the country If the banker exacts a margin of only ten more or less criticism of the action that has per cent, he will be loaning but 7.20 cents per been taken. This criticism emanates from pound on cotton, and the notes issued by the those who assert that the law of supply and United States will be for only seventy-five per demand should not be interfered with, and cent of this price, or 5.40 cents per pound, that any increase of circulation that is not which is the lowest price at which cotton has based on gold, or securities payable in gold, sold since the War of the Confederacy, and is inflationary.” practically the lowest price at which it has Adequate reply to these criticisms would ever sold since the railway and telegraph require too much space. It may be said, made a broad market for the most generally however, that any legitimate application of used commodity in the world.

the law of supply and demand presupposes The delay in organizing the Federal Re- a world in which the operation of economic serve Banks consequent upon the political law has not been, as at present, factitiously wrangle over the appointment of the Federal suspended by war and moratoria ; and those Reserve Board has made it necessary to rely who object to using stimulants to prolong upon the Aldrich-Vreeland Act and the issue commercial life and credit in the present of currency which it provides. Since its situation could just as consistently object to passage this law has not been availed of until the use of oxygen in case of pneumonia or

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