The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1915-03-31
State RECEIPTS COLLATERAL
MLAURlN HAS Plan FOR LOANS
ON COTTON.
Senator Banks OF Calhoun Gets So.
900 ON Certificates at ) Per Cent
Trip North u Success.

OO'N'hicAo' NioiSh O.-<tIIdllSC
ments to finance through New York
banks cotton stored i'm State ware
houses were announced yesterday by
John l.. McLaurin, warehouse COM
missioner. on his return from a trip to
Washington and New York. He was
accompanied by j. Arthur Banks,
State senator for Calhoun county.
The arrangements perfected produce
the money" said Senator Banks, who
told how he had borrowed SIC 1000 at
. per cent. straight interest on re-
ceipts for cotton which he has stored
in a State warehouse.
The practical difficulty heretofore
standing in the way Of the warehouse
system has been the financing of the
cotton, but this has now been re-
moved, it is said, so that hereafter
parties who have cotton stored in the
system and who desire to secure loans
on their warehouse receipts can do so
at a low rate of interest.
Valuable assistance was rendered
Mr.. McLaurin by w. p. G. Harding,
a member Of the federal reserve
board. and in New York the commits
sioner held satisfactory conferences
with the Guaranty Trust company and
the National City bank, Of which
Frank +. Vanderlip is the president.
1t was at the Guaranty Trust COM
pany that Mr.. Banks procured his
$1,000 and the South Carolinians re-
port that they believe it would have
been easier to get a loan of 500, 900
on cotton. They say hat the New
York ~financiers are enthusiastic over
the plan and will lend every assist
.ance.
Mr.. McLaurin has n proposition
submitted for his acceptance detail
ing a plan to overcome the difficulty
presented in the fact that the money
would be borrowed by so many diff
ferent individuals and the bank wishes
to deal with a single borrower. The
suggestion is made that Mr.. McLaurin
arrange with some responsible bank
or financial institution in South Caro-
lima to loan against State warehouse
receipts and that he take in connec-
ton with such loans, an agreement
giving the institution selected by him.
the right of re-hypothecation or sub.
rogation. Then it can send the ware
house receipts to a broker in New
York with a sight draft on the New
York bank, under the provisions of
the New York state law recently
passed, providing for such accept
ances. These acceptances are gen.
orally charged by the bank accept
Ing same 1 per cent per annum OF st
the rate Of IA per cent. for each 90
day acceptance. Drafts so accepted
can be sold in the market at the pres
ent time at a rate of 2 1-2 per cent.
$1,000 wv ~ iiS ~
ceptance commission of /. per cent.
for each 90 days, equal 2 1-2 per
cent. per annum, would make the
total cost of the money so borrowed
4 per cent. A local bank could get
this money and distribute it to their
customers at s per cent, and make a
profit Of 2 per cent. for it's services
and the risk assumed. 1T will take
some time for me to go over all these
matters" said Senator McLaurin,
land then 1 will make a statement;
| have placed a straight loan for Sem
ator Banks ut 5 per cent. straight in
terest, which is a good lea better
than the s per cent. discount now be-
Ing paid in South Carolina, and hard
TO get at that"