<SPAN name="XXXVII"></SPAN>
<h1 align="center" style="margin-top: 2em;font-variant: small-caps">Chapter XXXVII</h1>
<h2 align="center" style="margin-top: 2em;font-variant: small-caps">The Cotton Corner</h2>
<p>In modeling the laws, Dru called to the attention
of those boards that were doing that work, the so-called
“loan sharks,” and told them to deal with
them with a heavy hand. By no sort of subterfuge were
they to be permitted to be usurious. By their nefarious
methods of charging the maximum legal rate of interest
and then exacting a commission for monthly renewals
of loans, the poor and the dependent were oftentimes
made to pay several hundred per cent. interest per
annum. The criminal code was to be invoked and protracted
terms in prison, in addition to fines, were to be
used against them.</p>
<p>He also called attention to a lesser, though serious,
evil, of the practice of farmers, mine-owners, lumbermen
and other employers of ignorant labor, of making advances
of food, clothing and similar necessities to their
tenants or workmen, and charging them extortionate
prices therefor, thus securing the use of their labor
at a cost entirely incommensurate with its value.</p>
<p>Stock, cotton and produce exchanges as then conducted
came under the ban of the Administrator’s displeasure,
and he indicated his intention of reforming them to
the extent of prohibiting, under penalty of fine and
imprisonment, the selling either short or long, stocks,
bonds, commodities of whatsoever character, or anything
of value. Banks, corporations or individuals lending
money to any corporation or individual whose purpose
it was known to be to violate this law, should be
deemed as guilty as the actual offender and should
be as heavily punished.</p>
<p>An immediate enforcement of this law was made because,
just before the Revolution, there was carried to a
successful conclusion a gigantic but iniquitous cotton
corner. Some twenty or more adventurous millionaires,
led by one of the boldest speculators of those times,
named Hawkins, planned and succeeded in cornering
cotton.</p>
<p>It seemed that the world needed a crop of 16,000,000
bales, and while the yield for the year was uncertain
it appeared that the crop would run to that figure
and perhaps over. Therefore, prices were low and spot-cotton
was selling around eight cents, and futures for the
distant months were not much higher.</p>
<p>By using all the markets and exchanges and by exercising
much skill and secrecy, Hawkins succeeded in buying
two million bales of actual cotton, and ten million
bales of futures at an approximate average of nine
and a half cents. He had the actual cotton stored in
relatively small quantities throughout the South,
much of it being on the farms and at the gins where
it was bought. Then, in order to hide his identity,
he had incorporated a company called “The Farmers’
Protective Association.”</p>
<p>Through one of his agents he succeeded in officering
it with well-known Southerners, who knew only that
part of the plan which contemplated an increase in
prices, and were in sympathy with it. He transferred
his spot-cotton to this company, the stock of which
he himself held through his dummies, <i>and then
had his agents burn the entire two million bales.</i>
The burning was done quickly and with spectacular effect,
and the entire commercial world, both in America and
abroad, were astounded by the act.</p>
<p>Once before in isolated instances the cotton planter
had done this, and once the farmers of the West, discouraged
by low prices, had used corn for fuel. That, however,
was done on a small scale. But to deliberately burn
one hundred million dollars worth of property was almost
beyond the scope of the imagination.</p>
<p>The result was a cotton panic, and Hawkins succeeded
in closing out his futures at an average price of
fifteen cents, thereby netting twenty-five dollars
a bale, and making for himself and fellow buccaneers
one hundred and fifty million dollars.</p>
<p>After amazement came indignation at such frightful
abuse of concentrated wealth. Those of Wall Street
that were not caught, were open in their expressions
of admiration for Hawkins, for of such material are
their heroes made.</p>
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