Pine Bluff daily graphic., 1914-10-28
M AD00 EXPLAINS
 WORKINGS 0F THE
 BIG COTTON POOL Farmer Gets His Money
 After Three Committees
 Approve Application. LOCAL BANKS BEAR RESPONSIBILITY Central Reserve Committee Depends Upon Banks Dealing With Farmer to Safeguard Capital Handled.

Washington, Oct. 27-Secretary O.: the Treasury McAdoo tonight made known the general workings of the s135, ,0OC,OOO cotton pool to be admin istered under the supervision of the federal reserve board.
 The pool to be known officially as the cotton loan fund.-" will be ad- .ninistered under the direction of committee to be known as the cot ton loan committed" designated by the reserve board.
 The pool, for purposes of admin
 istration, will be divided into two
 classes as follows:
 A-Comprising subscribing banks
 or other corporations, firms or indivi-
 duals located in other than the cot
 ton producing states of Alabama. A--
 kansas, Florida, Georgia, Louisiana,
 Mississippi, North Carolina South
 Carolina, Oklahoma, Texas and Ten nessee. These subscriptions are linn tied to an aggregate of $100,O0o,O00. B-Banks or bankers located in the cotton producing states. These sub scriptions will aggregate $35,OO0,00O. The plan is for each subscriber on payment of part on the whole of the amount subscribed of the $135,- JGC, ,000 pool to receive a "participa- tion certificate" specifying under what terms he will be able to share in the distribution of the money de- rived from loans. Both classes of cer- lificates, A and B, will bear 6 per cent interest, payable quarterly Secretary McAdoo explained that New York bankers have agreed to Subscribe S50,000,000 of the $100,000,- GOO Of class A certificates, leaving the balance to be raised within a reas- enable time" under the supervision of the central committee of the sys- tenn banks in the non-cotton- -produc- ing states.
 The cotton loan committee shall appoint committees in each of the cotton-producing states, and each 1tate committee shall in turn appoint local committees in sufficient mum. bers to safeguard the practical work ings of the plan. All committees ap- pointed are subject to the approval of the central committee, anG all com IllIIt GCS are lO SCIVC WlIuOul COll- pensation.
 All loans made shall be first ap- proved by the local committee, the state committee and by two members of the cotton loan committee. When appropriations for loans have been approved as provided, the notes evil
 dencing same, together with the colla-
 teral required, must be forwarded to
 the officers of the cotton loan com
 mittee.
 As evidence of the security offered,
 each note rendered with an applica- tion for loan must be accompanied
 by receipts of an approved warehouse
 and by evidence of proper insurance, All cotton offered as security must be located in warehouse or other
 building under the ownership or con- trol of some person, firm or corpora ton, other than the borrower and, in approving such loans, the local and
 state committees shall pass upon suf- ficiency of the warehouse receipts,
 insurance and be satisfied the cotton is free from all liens, except that created by the loan from the fund. The committee approving loans shall
 be satisfied that the cotton offered as
 security is of the grade specified in the application.