The Ward County independent. [volume] (Minot, Ward County, N.D.) 1902-1965, 1915-10-14
CAN SECURE MONEY ON
Grain At 6 PER CENT
RECENT RULING OF FEDERAL
BANK PROVIDES LOW RATE
FOR SECURED SHORT TIME
LOANS - CONSIDERABLE RED
TAPE.

Thru the courtesy of the national
banks of this city, the Independent is
permitted to publish this week the lat
est ruling from the Federal Reserve
Bank of the ninth district, Minneapo-
lis, relative to the borrowing of money
at six per cent, with storage tickets
for security. The banks report that
to date there has not been single ap
plication for such a loan, but if any
farmers desire to go to the trouble
to meet the requirements as set out in
the following circular, issued Sept.
81, such loans may be secured.
To Member Banks Of District No. 9:
Enclosed herewith you will find Cir
cular No. II, and Regulation @, issued
by the Federal Reserve Board under
date of September 3rd, defining COM
modify paper, and your attention is
called to the first paragraph of the
regulation, which refers to bills Sc
cured by warehouse terminal receipts.
You will readily see that under the
regulation as originally drawn, it
could have been or no benefit to men,
Der banks in the Ninth District except
those located in Minneapolis and Du-
luth, where there are terminal eleva-
tors. The matter was called to the
attention of the Federal Reserve
Board, with the result that the regu-
lation has been amended.
We are today in receipt of COM
munication from the Federal Reserve
Board, dated September Oath, which
changes the first paragraph Of the
regulation to read as follows:
"In this regulation the term
Commodity paper" is defined as
a note, draft, or bill of exchange
secured by warehouse or terminal
receipts, or shipping documents
covering approved and readily
marketable, nonperishable staples
properly insured"
The regulation may now be made
of use by practically all of our men,
Der banks, and our Executive Commit
tee have therefore this day fixed dis
count rate of 3 per cent on notes of
this character, offered us, bearing the
endorsement of member banks, with
maturities up to and not exceeding
ninety days.
The warehouse receipts, which cal
laterals the notes offered, must be ne
gotiable and confer control of the
commodity, without restrictions or
qualifications, subject only to storage
charges. ..
Unless the product is stored in fire.
proof houses, receipt must also pro-
vide for fire insurance. Otherwise,
fire insurance policies, duly assigned,
must accompany.
! If the individual, firm or corporation
issuing the warehouse or terminal re-
/ ceipt, is not one whose standing and
responsibility are known to US, or
readily obtainable, their financial
statement must accompany.
A reasonable margin should always
be provided as a protection against a
fall in the market price of the COM
modify pledged, and where the amount
involved is Of any considerable con-
sequence, or the amount loaned per
bushel approaches the market value,
collateral form Of note should be used
so that the holder would be permitted
to call for additional collateral OF
be allowed to dispose Of the collateral
in case Of decline below fixed per
centage in the market value of the
product pledged.
/ Every application for rediscount OF
paper of this character, must carry q
! certificate over the signature of ar
officer, as follows:
/ "The rate of interest received
4 or to be received upon the paper
i offered herewith, including dis
count and commissions, does not
i exceed six per cent per annum."
Respectfully,
/ THEODORE WOLD,
Governor.
4 The banks explain that farmers
holding grain can secure money a