The herald and news. [volume] (Newberry S.C.) 1903-1937, 1914-12-11

Eank, with a federal reserve bank.
"In regard to the cotton loan fund.
would say that cotton loan commit
tees have been appointed in the va
rious States and the South Carolina
committee is as follows: R. G. Rhett,
chairman, president Peoples National
bank, Charleston; Henry Schachte,
president Germania Saving bank,
Charleston: E. H. Pringle, Jr., vice
president Bank Of Charleston. y. B.
A.: E. ". Robertson, president Ma
tional Loan and Exchange bank, CO.
lumbia: c. G. Roland, president
Bank of Sout2 Carolina, Sumter and
John NJ Kinard president CONNER
cial bank. Newberry.
81 inclcse for your information an
unofficial analysis Of tie plan which
has been substantially followed in the
completed draft and also a typical
bank statement, showing how a bank
can ease itself by participating in tie
fund and place itself in position to
discount more freely all classes of
good paper that may be offered to it.
very truly yours,
"W. P. G. Harding,
Member Federal Reserve Board.
Hon. Jno. L. McLaurin, State Ware
house Commissioner.
columbia, S. c."
Two Relief Sources.
Now, this means that We have two
avenues Of relief:
l. The Wade loan fund
>. The discount feature OF the fed
eral reserve act.
In bota cases the situation is
squarely up to t e banks in South Car
clina The federal government offers
the machinery; if we fail to take ad
vantage of the opportunity we are re-
sponsible for the consequences.
| have carefully over
| have been carefully over the pa
pers sent me by Mr.. Harding and Will
endeavor to explain them so the aver
age man can understand it. The Wade
plan contemplates loan for one year
direct upon cotton on the basis of
cents per pound There is loan COM
nittee in each State who pass upon
applications and they will soon make
some announcement as to South Caro-
Ina. | found in New York that tie
mere statement by the secretary O, the
treasury that the loan fund was COM
plete had steadying effect on the
market and created a better feeling III
financial circles toward cotton.
An Example.
In order to illustrate the operation
of the Wade plan, will suppose the
case of a farmer who has just writ
ten to me that he has 500 bales of
cotton in a State warehouse and de-
sires a loan of $4,000 Mr.. Harding
said that one of the difficulties toat
he was experiencing was the title of
the cotton and weights and grades
that banks were objecting to respon-
sibility on that score This can cause
no trouble in South Carolina, as our
State receipt covers title. weight and
grade Supposing that the 900 bales
average middling and 500 pounds in
weight The receipts would be at
tached to a note for $4,000; $3.50
would be given my friend in Class B
certificates bearing interest at the
rate O: 6 per cent; $11 ,250 would
be given him in cash, less per cent,
witch is retained by the loan COM
mittee as a guarantee fund to cover
losses that may occur in making
loans, and the expense of disbursing
the loan fund. The expense, it is
stated, VIII not exceed One-elSntn OF
per cent. The loan is made for a
period o. one year, and on the ap
proval of the committee may be re-
newed for another six months
When the farmer sells his cotton
and retires us $4,000 note he pays
interest on tie $11,25O at the rate
Of per cent for tie time he has
the money He would also pay in
terest on the B certificate but this
interest he himself would get. The
3 per cent IS held until the IiQuida
ton OF the entire fund is complete.
The borrower pays 6 Is per cent.
s!raiGh, interest. which inclgdes MS
share Of tie operating expenses. but
lOar MOI ipcf,,do 1O.cn. IN cCn,a O,14