The Caldwell watchman. (Columbia, La.) 1885-1946, 1914-12-18
PLAN Of HANDLING
The COTTON FUND
METHOD FOR OPERATION OF THE
$13s,000,0O0 LOAN FUND IS
DECIDED UPON.
FARMERS ARE NOT SATISFIED
President II. S. Mobley Of the Arkan
sas Farmers Union Says Scheme
VIII Not Help Small Farmer.

Neutrality-suspicious. have been COM
pleted for the operation of the $780,
100000 cotton loan fund, and meet"
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.
G.. 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. Castor 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 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 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. it 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 no,
applied for
1t Is understood that red tape and
undue Formally will be eliminated al
much as possible in the handling o.
the fund.
Explanation Of the Plan.
The following Is brief explanation
Of the plan for the benefit of cotto1
owners and bankers:
Loans will not be made on lots o
less than 100 bales, except in particu
lar instances.
The farmer, the merchant and othel
cotton owners in any state may appl,
to his bank for a loan on cotton to b.
paid within one year after February l
1915, with interest payable Quarterl,
at the rate of 6 per cent per annum.
The loan may be paid and the secur
tty released at any time during tn,
year, after the borrower gives 80 Jays
written notice. and upon payment O
interest to the end OF the quarter.
AS security for the loan, the borrow
er will offer cotton valued at ST,
cents per pound for middling" grade
Adjustment to be made for all grade.
above "iow middling.'
The margin of security will be- q
per cent, so that for loan of $1,000
Ae security would be 40 bales of mid
ing cotton, with a little less securit,
the higher grades, and a little NOR
6ecurity for the grade or two lower.
From the proceeds Of the loan, thre,
per cent will be turned into the Cot
ton Loan Committee in New York as ;
guarantee against loss from any cause
Expenses Of administration. which will
not exceed l.8 of l per cent, will b.
paid from this fund.
It should be remembered that tn,
services Of every one connected Will
the pool except clerical, legal and tec!,
meal. are given without charge. There
fore II the pool Is administered with
out loss. as expected, the guarantee
fund will be returned prorata to til.
borrower.
From the example loan OF 5000
there would be deducted for the guar
antee fund $50. or soc a bale on To-
bales Of cotton. The net proceeds o
the loan to the borrower would be 81.
; DO. The banks are not allowed I.
charge any commission or othe: fees
The cotton OF course must be storet
I'm safe place in the custody Of Z
Warehouseman other than the nor
rover or "" banker. The grade must
be established to the satisfaction o.
Cotton BeIt Employees Divided.
st. Louis ~ v,te ~ strike has beer
adopted by w. ""~'""tors and brake
men of the :'-s OF the Cotton Rel,
Railroad '""s. while vote
against p ~ adopted ny the
6remen's '"n'rnn's organiZa
lions. r. his effect was
brought " - r. Fl. R7ittou