Macon beacon. [volume] (Macon, Miss.) 1859-1995, 1914-12-18
PLAN Of HANDLING
THE COTTON FUND
METHOD FOR OPERATION OF THE
$t35, 00o,00o LOAN FUND Is
DECIDED UPON.
FARMERS ARE NOT SATISFIED
President n. S. MobIey Of the Arkan
sas Farmers Union Says Scheme
VIII Not Help Small Farmer.

Neutrality-suspicious. nave been com
bleted for the operation Of the $685..
0 10000 cotton loan fund, and a meet
ing Of state chairmen is being held in
Washington. The plan vas approved
on November 80, 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 viii
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 ].
Wade OF st. Louis, Levi T.. Rue of Phil.
adelphia and William "A. CASTOR OF
Boston.
The forms Of contracts, notes, certi.
fcates, assignments, ETC., are now
being prepared by attorneys, and 1t is
expected that money will be available
for loans within Is days, probably i'm.
mediately following a 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 r made for n 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.
1t 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.
1t Isl understood that red tape and
undue formality will be eliminated as
much as possible in the handling of
the fund.
Explanation Of the Plan.
The following is a 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 a loan on cotton to be
paid within m year after February 1,
1915, with interest payable quarterly
at the rate Of 6 per cent per annum.
The loan may be paid and the secur-
ity released at any time during the
year, after the borrower gives 80 uays'
written notice. and upon payment of
interest to the end Of the quarter.
AS security for the loan, the borrow
er will offer cotton valued at six
cents per pound for "middling" grade.
Adjustment to be made for all grades
above "low middling."
The margin Of security will be 20
per cent, SO that for a loan Of S 1000
the security would be 120 bales of mid
ding cotton, with a little less security
for the higher grades, and a 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 1-S Of l per cent, will be
paid from this fund.
IL bUOulu U0 ItuleI1UoT6u tudL inc
services Of every one connected with
the pool except clerical, legal and tech
nical, are given without charge. There
fore II the pool is administered with
out loss, as expected, the guarantee
fund will be returned prorata to the
borrower.
From the example loan Of $4,000
there would be deducted for the guar
antee fund $50, or soc a bale on 100
bales of cotton. The net proceeds Of
the loan to the borrower would be 81
80. The banks r not allowed to
charge any commission or other fees.
The cotton Of course must be stored
in q safe place in the custody Of a
warehouseman other than the hor-
rover or the banker. The grade must
be established to the satisfaction Of
Cotton Belt Employees Divided.
Ct. LOUISA vote to strike has been
adopted by the conductors and brake