The Bamberg herald. [volume] (Bamberg, S.C.) 1891-1972, 1914-10-15

tons 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
bankers and experienced cotton hand
iers
It is expected that New York city.
as the centre OF finance in the coun-
try, will subscribe $50 900 to this
fund, and possibly more.
Not less than one hundred finan-
clal centres will be asked to contrib
ute to the fund. and to undertake to
provide adequate, safe storage faclll-
ties for the surplus crop. and to issue
a uniform warehouse receipt for cot
ton, to be used as collateral to loans.
How this fund will be loaned:
Each financial institution-national,
State banks and trust companies-to
make loans to importers, manufactur-
ers, buyers, merchants and cotton
producers not to exceed 6 cents per
pound, receiving the notes of the bor-
rowers, drawn to the order of the
loaning bank and collateraled by cot
ton in warehouses represented by
uniform, negotiable warehouse re-
ceipts attached to the notes, together
with insurance in favor of the loan
ing bank.
The note, the warehouse receipts
and insurance certificate to be indors-
ed by the borrowing bank. The in
tegrity and reliability of the ware
house to be guaranteed by the banks
at that place, acting through the
Clearing House association, or other
wise, in concert.
The loaning bank would obtain its
money by forwarding the note and
collateral, bearing its Endorsement,
to the nearest agency (bank) of the
syndicate; the agency (bank) would
rediscount the note and reimburse
itself by drawing upon the syndicate
managers, advising the syndicate
managers that the loan had been
made in accordance with prescribed
rules and conditions, and that it
(agency bank held the note and col
lateral 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
thereof, 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,
having originally received New York
exchange for the proceeds Of the
loan, would have to furnish New
York exchange for remittances to the.
syndicate 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 term of six months, and
for a further term of a second six
months, after receiving the approval
of the syndicate managers.
Rate of interest: AS this fund is
made up to meet an emergency, it is
not intended that it shall be put into
competition against usual loans made
by financial institutions which usual
ly loan upon cotton; therefore, the
interest rate would have to be more
than per cent. per annum. It is
not believed that syndicate to fur
nish this large amount of money
could be organized in these times Of
of high rates to yield less than Z per
cent. per annum, net, to the members
of the syndicate furnishing the
money In addition there would be
various expenses to be met, suca as
proper compensation for services of
the syndicate managers and to the
agency banks; also for printing,
postage, advertising and various
other expenses which would be Ger
tain to arise, and as it will involve
an immense amount of detail to
handle the fund, a charge of 1-l0th
of 1 per cent. per month would be
made TO meet all these expenses; the
idea being not to encourage the hold
ing of cotton beyond a period at
which it should be sold at a reason
able price.
Charleston Men Approve.
The members of the South Caro-
lima Bankers conference, who met
here today, had the following :ele-