The herald and news. [volume] (Newberry S.C.) 1903-1937, 1914-10-27
VIRTUAL AGREEMENT
ON LOAN FUND PLAN
Secretary of Treasury Announces That
Modification OF st. Louis Scheme
Has Net Approval of Board.


tative agreement was reached tonight,
which tine board virtually approved,
by which fund OF $135, 100000 will
be raised to care for the surpluc cotton
! crop and extend aid to cotton pro-
ducers. TIE plan is slightly different
from that originally proposed, but
loans will be made on cotton at 6
cents a pound bearing interest of not
more than per cent. for one year
with a privilege of six months extern
sion.
The reserve board will have the
supervision of the fund but will oper-
ate through a committee OF bankers
and business men,
All details OF the plan were not
made public tonight New York bank
ers haze agreed to subscribe $5O,000,-
900 to the fund and Southern banks
are counted on for S35,O0O,OOO more.
The remaining $5O,OO0,0O0 is to be
raised in non-cotton producing States.
Secretary McAdoo outlined the plan
tonight in tie following statement:
Continues Its Work.
"The federal reserve beard today
continued consideration of plans for
relie- of the cotton situation giving
special attention to a plan suggested
by Albert A. H. Wiggin, J. H Alex
ander, A. ]. Hempnill and William
Woodward of New York and Festus
J. Wade of st. Louis for the raising
of a cotton loan fund aggregating
$135, 100000 This plan has been
evolved from that originally proposed
by Mr. Wade Full details can not
be given out until it is submitted to
bankers in Leading financial centres
to ascertain whether or not they will
support it. 1t has been approved ten
tatively by the reserve board, and
bankers in the leading financial cities
will be asked imm mediately to sub
scribe the necessary amount New
York bankers have agreed to sub
scribe $5O,OOO,0OO upon condition that
an additional s50,O0O,0OO shall be sub
scrjbed."
The outline of the new plan fol-
lows:
'fTne new plan contemplates the
plan of loaning money on cotton at
s cents a pound and at an in
terest rate of not exceeding per cent.
for period of one year with the
privilege q; a renewal for an addition
al period of six months.
10 Pay Expenses.
''It is provided that all services
rendered in the administration of the
fund by voluntary committees and
bankers shall be without charge, but
that the borrowers shall pay per
cent on the amount loaned to them
into fund, which is to be called the
guarantee fund and which is to be
used exclusively for paying the neces-
sary expenses of adminfstrat which
it is estimated will not exceed one
eighth of per cent, and the remain
der to be used to make good any
losses which maybe incurred on loans
that may be made ON cotton at the
stipulated rate of cents per pound
Upon the conclusion of the whole
transaction the amount OF money Lent
in the guarantee fund will be refunded
pro rata to the borrowers.
st is hoped tnat responses may
be received from the bankers OF the
leading cities early next week. II
favorable the plan viii be put into
immediate execution. In that case
the cotton lcaa fund will be admins
tered under the general supervision OF
the central committee of the indi-
vidual members of the federal re-
serve board, which committee will in
turn appoint committee to be known
as the cotton loan committee and
which VIII have actual management
of the fund.
''The plan in its new form is more
practical than anything heretofore
presented and it is hoped rhe amount
required may be promptly sub
scribed"