The Spectator., 1914-12-11

UVV,VUV ColtOu lOdu luuu, duu d IuoCe- ing of state chairmen is being held in Washington. The plan was approved on November 30, 1914, by the Central Committee, composed of all the mem- bers of the Federal Reserve Board. The Cotton Loan Committee, which worked out the plan and which will be in charge of the administration, IS composed of two members of the Fed eral Reserve Board of Washington, D. C., W. P. G. Harding, chairman, and Paul M Warburg, and five representa- tive bankers, Albert H. Wiggin and James s. Alexander of New York, James B. Forgan of Chicago, Festus J. Wade of St. Louis, Levi L. Rue of Phil adelphia and William A. Gaston of Boston.
 The forms of contracts, notes, certi- ficates, assignments, etc, are now being prepared by attorneys. and it is expected that money will be available for loans within Is days, probably im- mediately following meeting of the chairmen of the state committees.
 The state committees will appoint local committees in sufficient number to facilitate and safeguard the practi- cal workings of the plan. The plan itself is simple.
 The fund is distinguished by its operation as a pool of many lending and borrowing interests, and by the length of time that the contracts will run. Loans are made for one year, though they may be paid sooner. On the other hand, the Central Committee has the right to hold the contributors to the fund an additional six months after the first year, if conditions, in their opinion. justify.
 It has been generally considered that the cotton fund will not all be applied for The amount to be used, however, must be determined by the first day of next February, because the subscribers to the fund will be re- leased on that date for the balance not applied for.
 It is understood that red tape and
 
 much as possible in the handling of the fund.
 Explanation of the Plan.
 The following is brief explanation of the plan for the benefit of cotton owners and bankers:
 Loans will not be made on lots of less than 100 bales, except in particu- lar instances.
 The farmer, the merchant and other cotton owners in any state may apply to his bank for loan on cotton to be paid within one year after February l, 1915, with interest payable quarterly at the rate of per cent per annum.
 The loan may be paid and the secur- ity released at any time during the year, after the borrower gives 30 uays' written notice, and upon payment of interest to the end of the quarter.
 AS security for the loan, the borrow CT will offer cotton valued at six cents per pound for "middling" grade. Adjustment to be made for all grades above Tow middling"
 
 per cent, so that for loan of S3,000 the security would be 120 bales of mid ding cotton, with little less security for the higher grades, and little more security for the grade or two lower.
 From the proceeds of the loan, three per cent will be turned into the Cot ton Loan Committee in New York as a guarantee against loss from any cause. Expenses of administration. which will not exceed Is of l per cent, will be paid from this fund
 It should be remembered that the services of every one connected with the pool except clerical. legal and tech nical, are given without charge. There fore if the pool is administered with out loss, as expected, the guarantee fund will be returned prorata to the borrower.
 From the example loan of s3,000 there would be deducted for the guar antee fund $90, or soc bale on 100 bales of cotton. The net proceeds of the loan to the borrower would be $2,- BIO. The banks are not allowed to charge any commission or other fees. The cotton of course must be stored in safe place in the custody of a warehouseman other than the bor- rover or the banker. The grade must be established to the satisfaction of the committee. It must be free from lien and protected by insurance against damage.
 Instructions to Bankers.
 The banker must be prepared to contribute to the loan fund one-fourth of the amount that his customers bor- row. He makes his subscriptions as the loans are made. sending forward -------->--~---->~-
 Cotton Belt Employees Divided.
 St. Louis.-A vote to strike has been adopted by the conductors and brake men of the unions of the Cotton Belt Railroad emplOyes while a vote