The Anderson daily intelligencer. [volume] (Anderson, S.C.) 1914-1915, 1914-12-11
FACILITIES NOW AMPLE
FOR FINANCING COTTON
CONTINUED FROM PAGE THREE.)

certificates bearing interest at the
rate of 6 per cent; $11, $50 would be
given him In cash, less 8 per cent,
which is retained by the loan COM
mittee as guarantee fund to cover
losses that may occur in making
loans, and the expense OF disbursing
the loan fund. This expense, it is
stated. will not exceed one-eighth OF
l per cent. The loan is made for a
period OF ono 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 his $15D0O note, he pays
interest on the $11,250 at the rate of
6 per cent. for the time he has the
money He would also pay interest
on the certificate, but this interest
he himself would get. The 3 per cent
Ia held until the liquidation of the
entire fund Is complete. The borrow
er pays l-S per cent. straight inter-
est, which includes his share OF the
operating expenses, but does not in
clude losses to come out of the per
cent.
The terms OF the loan forbid any
one to charge commissions for con-
Quoting the negotiation for the loans
the bankO are expected to do this
gratis for their customers and can
AFFORD to do so. as they will receive
the money on deposit or debts due.
For Immediate Relief.
The second channel open to us fs
through the discount. feature of the
federal reserve act. It is there that
we must look for immediate relief.
1t Is well to remember, however.
that the federal reserve bank at
R,lchmond Is the bank of bankers, and
that relief can only come through
the member banks OF the federal, re-
serve system.
Under section 13 of this act, 'eany
fedaral reserve bank may discount
notes, drafts and bills of exchange
arising out OF actual commercial
transactions; that is. notes, drafts
and bills OF exchange issued or drawn
for agricultural or commercial pu--
poses." ETC., ETC., for q period of 90
days: Provided, That notes. drafts
and bills drawn or issued for com.
mercial purposes or based on live
stock, and having a maturity not ex-
ceeding six months, may be discount.
ed in an amount to be limited to a
percentage Of the capital of the fed
erai reserve bank" etc. Nhis amount
10 fixed at 10 per cent. of the unim-
paired capital and surplus of the
bank
Then the act, in TIE following spe-
cffic terms, exempis from all restric-
tion "the discount OF bills of exchange
drawn In good faith against actually
existing Values
At the cotton conference called by
Secretary McAdoo. August "a and 25,
he ruled that under the Aldricti-
Vreeiand emergency act, cotton ware
house receipts were acceptable as se-
crrsty FOR the Issue os currency.
Loan Value BasIs.
Now, with the federal reserve act
we have a further enlargement OF
their sphere of usefulness.
The committee appointed by Mr.
McAdoo. after cor6sratulating him
upon his ruling as to warehouse re-
ceipts, said that THE average market
value OF niddling cotton. for the past
six years has been in excess OF IL
cents per pound" that cotton does
not deterlorate when properly ware
hnused.' etc.. etc. tIt can, therefore.
Ie Satticu oseE until tne restoration
q normai business conntt.ons enables
sms @oFids consumption to absorb II.
Ihe committee therefore Is OF the
opinion .tnnt avery ,enorf should be
maae 20 assist the producnrs to hold
,their cotton Tor price that Will min
imize their toss, etc, etc. The COM
mittee then suggested 9 cents per
pound as the basis for loans.
.,S s oSt 1uoe put mt
operation there Is conferred ample
power to protect the producers OF cot
ton against loss from lack OF an ade-