Tensas gazette. [volume] (St. Joseph, La.) 1886-current, 1915-10-15
COTTON FUND DETAIL EXPLAINED
Money Will Not Be Loaned on Less Than One
Hundred es---Plan Not Satisfactory
to the Small Farmers.

Neutrality-suspicious. have been com
pieted for the operation of the s135,
100000 cotton loan fund. and a meet
Ing OF state chairmen lis being held in
Washington. The plan was approved
on November 80, 1914, by the Central
committee. composed Of all the mem
bers OF the Federal Reserve Board
The Cotton Loan Committee, which
worked out the plan and which will
be in charge of the administration, is
composed OF two members of the Fed.
eral Reserve Board of Washington, d.
G., W. =. q. Harding, chairman, and
Paul NJ. Warburg, and five representa-.
live bankers, Albert II. Wiggin and
James s. Alexander of New York,
James b. Forgan OF Chicago, Festus J.
Wade OF st. Louis. Levi l.. Rue of Phil
adelphia and William A. CASTOR of
Boston.
The forms OF contracts, notes, certi.
ficates, assignments, etc, are now
being prepared by attorneys. and it is
expected that money will be available
for loans within Is days, probably i'm
mediately following a meeting of the
chairmen OF the state committees.
The state committees will appoint
local committees in sufficient number
to facilitate and safeguard the practi.
cal workings of the plan. The plan
itself is simple.
The fund is distir ,uished by its
operation as a pool OF many lending
and borrowing interests, and by the
length Of time that the contracts will
run. Loans are made for one year,
though they may be paid sooner. On
the other hand, the Central Committee
has the right to hold the contributors
to the fund an additional six months
after the first year, IL conditions, In
their opinion, justify.
1t has been generally considered
that the cotton fund will not all be
applied for. The amount to be used,
however, must be determined by the
first day Of next February, because
the subscribers to the fund will be re-.
leased on that date for the balance not
applied for.
1t is understood that red tape and
undue formality will be eliminated as
much as possible in the handling of
the fund.
Explanation Of the Plan.
The following is brief explanation
Of the plan for the benefit of cotton
owners and bankers:
Loans will not be made on lots of
less than 100 bales. except in particu-
lar instances.
The farmer. the merchant and other
cotton owners in any state may apply
to his bank for a loan on cotton to be
paid within one year after February 1,
1915. with interest payable quarterly
at the rate Of per cent per annum.
The loan may be paid and the secur-
ity released at any time during the
year. after the borrower gives 80 uays'
written notice. and upon payment of
interest to the end of the quarter.
AS security for the loan. the borrow
er will offer cotton valued at six
cents per pound for "middling" grade.
Adjustment to be made for all grades
above low middling."
The margin of security will be 20
per cent. so that for a loan of $4,000
the security would be 12O bales Of mid
ding cotton, with a little less security
for the higher grades, and little more
security for the grade or two lower.
From the proceeds of the loan, three
per cent will be turned into the Cot.
ton Loan Committee in New York as
guarantee against loss from any cause.
Expenses of ADMINISTRATION, which will
not exceed Is Of 1 per cent. will be
paid from this fund.
II should be remembered that the
OF every one connected with
the pool except clerical, legal and tech
meal. are given without charge. There
lore II the pool is administered with
put loss. as expected, the guarantee
'und will be returned prorata to the
borrower.
From the example loan Of $4,000 |
here would be deducted for the guar
lntee fund $50, or soc a bale on 100
,ales of cotton. The net proceeds Of |
ne loan to the borrower would be ST.
40. The banks are not allowed to /,
:harge any commission or Other fees.
rhe cotton OF course must be stored
3 q safe place in the custody Of a
other than the Dor
over or the banker. The grade must
,e established to the satisfaction of
he committee. II must be free from
lem and protected by insurance
gainst damage.
instructions to Bankers.
The banker must be prepared to
attribute to the loan fund one-fourth
Z the amount that his customers Dor
ow. He makes his subscriptions as
he loans are made. sending forward
~-~-~~-----~~~-~-
Cotton Belt Employees Divided.
st Lcs,is.-A vote to strike has been
dorted by the conductors and brake
-