The daily star-mirror. (Moscow, Idaho) 1911-1939, 1923-08-22

!. Agricultural credit corporation
may be organized for a cash capita
!, OF $4,000, or more, and are simila
: to livestock loan companies, excep
that the capital is not as large a
that usually required of a livestocl
loan company and their field O
| operation will likely be confined t.
their immediate locality. This is
new instrumentality and inasmuch Al
: there are no specific laws in mos
J states governing such corporations,
is believed that they should be or
ganized under the general corpora
, ton act Of your state. They SHOULD
be organized and financed by men O.
substantial means and highest integ
r1ty and competent manager, who
understands local conditions and the
handling of chattel mortgages shoulc
be employed.
!" 1t will not require great dea
or one mans time to handle the af-
fairs of such an organization and he
should do this in connection with his
other business. Capable young men
should be obtained to look after this
work for nominal salary, unless, of
course, a large organization is
planned that would require all of one
mans time.
While the profits will not be
large, yet a fair profit can be rea-
I1zed, if care is used in making the
loans, as the operating expenses
should not be heavy and in addition
to the profit on the original capital
invested, the corporation is allowed
a margin of one and one-haIf per
cent on all loans rediscounted with
the Federal intermediate Credit bank.
Loans may be taken from such cor
| porations under the same conditions
| as those taken from livestock loan
companies
| find that some of the best man
aged livestock loan companies are
now investing all of their capital in
liberty bonds or some other good con-
vert1ble bonds. While the rate of
interest is not as large on such in
vestments, yet they serve as a re-
serve fund and place your company
IN much sounder position. BY Iodg-
ing such bonds with the Federal In
termediate Credit bank as additional
security, it allows us to be more Iiber-
al IN considering loans for redis-
count. While this is not a require
ment, 1t is suggestion offered with
view OF enabling this bank to render
greater service both to livestock loan
companies and agricultural credit cor
porations.
Cooperative associations are the
only organizations to which we may
make direct loans, but such loans
must be satisfactorily secured by
warehouse receipts on staple agricul-
tural commodities. The federal farm
loan board at Washington has classed
as staple commodities grain, cotton.
WOOL, tobacco, peanuts, broom corn.
Deans Including soy beans), rice.
hohalr, nuts, canned fruits, and
vegetables, and baled hay, when pro-
perry Warehoused. Other items have
oeen left for future determination.
large number of states now
nave laws governing cooperative as
soclat1ons and such associations
should be organized under those laws
and with the greatest care. so that
future dissatisfaction and difficulties
may be avoided, both for the indiyi-
dual members and the association IT.
self. One of the principal things to
De considered is the contract with
members and standard form should
be used as such forms have been m
held by the courts in many of the
states, particularly in Washington.
oregon, and California. Another i'm
portant feature of cooperative as i,
soc1atlon is the pooling of the pro-
ducts of its members. Only commo-
oltles OF members should be handled
as otherwise the association might be
regarded as merchant or dealer in !
Inc commodity rather than a strictly !
cooperative concern. Such organiza- ?
ions may be organized with or with
out capital, but should be operated on T
non-prof1t basis except in cases g
Vhere they are capitalized, in which {
went, the profit on the capital must {
'e united to certain per cent
lnasmuch as we are not permitted
o make loans for less than six
months, cooperative marketing as
oclatlons will be required to make
rrangements for their temporary
needs which will be matur
ng within less than six months be-
ore loans from them can be con-
idered by the Federal intermediate
'redit bank.
In the event that a co-operative
ssociation handles a commodity that
equires capital investment for the
urpose of owning and operating a
'arehouse, packing plant or other
lm1lar purpose, it is advisable to in
orporate separate company to be
wned by the members of the associa-
on. Cooperative associations that
1gage in merchandising cannot avail
lemselves of the facilities of the
ederal intermediate Credit bank
Loans offered to us by any of
e four agencies mentioned above are
'qu1red to be secured, but individu-
$ are not required to guarantee each
hers loans.
/" A federal intermediate credit
INK shall not rediscount notes of
~ person or corporation in an
Mount exceeding the individual loans
1ich such bank or other rediscount-
agency may make under the laws
the Jurisdiction under which it is
ganized, or if no such limitation is
posed, then the limit shall be 20