The Forrest City times., 1914-12-11
PLAN OF HANDLING
 THE COTTON FUND
METHOD FOR OPERATION OF THE $136,ooo,ooo LOAN FUND IS
 DECIDED UPON.
FARMERS ARE NOT SATISFIED
President H. s. Mobey of the Arkan. sas Farmers Union Says Scheme
 Win Not Help Small Farmer.

Washfngton.-Plans have been com pleted for the operation of the s135 0eO,0o0 cotton loan fund, and a 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 VII 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 I Wade of St. Louis, Levi L. Rue of Phil adelphia and William A. Gaston 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, if conditions, in their opinion, justify.
 It 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
 k is-understood that red tape and aadde foFnality will be eliminated as much as possible in the handling of the fund
 Explanation of the Plan. ~ The following is brief explanation of tke 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 o,har cotton owners in any state may apply to his bank for a aloan on cotton to be paid Within one year after February I, 1915, with interest payable quarterly at the rate of $ per cent per annum.
 The loan may be paid and the secnr- ity released at any time during the year, after the borrower gives 30 uays' written notice, and upon {payment of interest to the end of the quarter.
 As security for the loan. the borrow CT will offer cotton valued at six cents perpound for amiddling" grade Adjustment to be made for all grades above How middling&
 D The margin of security will be 20 per cent, so that for a loan of S3.000 the security would be l20'bafes of mid ding cotton. with a little less security for, the higher grades, and little more security for the grade or two lower. From the proceeds of the loan three per<cent wDl be turned into the Cot ton Loan Committee in New York as guarantee against loss from any cauSe Expenses of Administration which VII not exceed 1-S of per cent, Wifi ba paid from this fund.
 z It should ~remembered thaf the Services of everyfo onet connected with she pool except clerfcaf;e legal and tech3 nieal, are given without charge, There fore if the pool is administeredswiih- out loss, asesexpected,s the guaraptee fund will returned prorata to the borrower. N.ss
 From the example s4san of s3,000 there would be deducted for the guar- antee fand $90 or gee a bale on 100 bales of fsottet'->-,!'nh net proeaeds of the loan to the borrower would be~$2.- qfo., The banks arernot allowed to. ,horoe on,y coynn9fsxiar or Othe- fees Tho cotton of course smu.t be stored in a safe place in the custody Of q warehouseniaE other than sthe ho:' rower.or the banker sl'he grade must be established to the satisfaction of w rs 4@
 @-.ye Asss
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