Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1914-10-13
THAT $50, ,ooo, 900 LOAN.
Outline Explanation Of Details Of the
Plan.

Columbia bankers held a meeting
Friday to consider the subscribing Of
South Cardinals part Of that $l50,OOO,-
900 cotton loan, proposed by j. Festus
Wade Of ST. Louis. The plan contem-
New York and the east, $50,OO0,000 by
plates the subscription Of $50,000,0O0
by New York and the east, $50,000,000
by st. Louis and the west and $50 O.000,-
600 by the south. The detailsof the plan
are outlined by Mr. August Kohn for
the News and Courier as follows:
TO be formed by inviting subscrip-
tions from the national and state banks
and trust companies of the country,
merchants and others.
This syndicate to be managed by
some important firm experienced in
that kind Of transaction, assisted by an
advisory committee Of prominent bank
ers and experienced cotton handlers
1T is expected that New York city
as the centre Of finance in the country,
will subscribe $5O,000,00O to this fund
and possibly more.
Not less than one hundred financial
centres will be asked to contribute to
the fund, and to undertake to provide
adequate, safe storage facilities for the
surplus crop, and to issue a uniform
warehouse receipt for cotton, to be
used as collateral to loans.
How this fund will be loaned: Each
financial nstitution-national, state
banks and trust companies-to make
loans to importers, manufacturers,
buyers, merchants and cotton produc-
ers not to exceed cents per pound.
| receiving the notes Of the borrowers,
| drawn to the order Of the loaning bank
and collateraled by cotton in ware
house, represented by uniform, nego-
| table warehouse receipts attached to
| the notes, together with insurance in
favor Of the loaning bank.
THE note, the warehouse receipts
| and insurance certificate to be endors-
| ed by the borrowing bank. The integ-
| rity and reliability of the warehouse to
| be guaranteed by the banks at that
place, acting through the Clearing
House association, or otherwise, in
concert.
The loaning bank would obtain it's
money by forwarding the note and COL
lateral, bearing it's endorsement to the
nearest agency (bank) Of the. he.syndicate;
the agency (bank) would rediscount
the note and reimburse itself by draw
ing upon the syndicate managers, ad-
vising the syndicate managers that the
loan had been made in accordance with
prescribed rules and conditions, and
that 1t (agency bank) held the note and
collateral in trust for account Of the
loaning syndicate.
| THE bank first making the loan it
self to look after the insurance and
attend to all necessary renewals there
or, and payments Of premiums; and
that bank having endorsed the note
could be relied upon to do so.
"All notes should be made payable at
the agency bank, and that bank, hay-
ins originally received New York ex-
change for the proceeds Of the loan
| would have to furnish New York ex-
| change for remittances to the syndi-
cate manager when the loan should be
| liquidated.
Duration OF loans: All loans shall
be made payable one year after date
| Cor earlier at borrowers option), with
the right on the part Of the agency Of
| the fund to extend such loans for q
| term of six months, and for a further
term Of a second six months, after re-
| ceiving the approval Of the syndicate
managers.
Rate Of Interest: AS this fund is
made up to meet an emergency, 1t Is
not intended that 1t shall be put into
| competition against usual loans made
by financial institutions which usually
loan upon cotton; therefore, the inter-
est rate would have to be more than 6
per cent per annum. 1t is not believed
that a syndicate to furnish this large
amount Of money could be organized
In these times Of high rates, to yield
less than per cent per annum net, to
members Of the syndicate furnishing
the money. In addition there would be
various expenses to be met, such as
proper compensation for the services to
the syndicate managers and the agency
banks; also for printing, postage, ad-
VarflSinQ
which would be certain to arise, and It
will involve an immense amount of
detail, charge Of 1-10th Of per. cent
per month should be made to meet all
these expenses, the idea being not to
encourage the holding Of cotton beyond
point at which 1t should be sold at
reasonable price"