COOPERATIVE PURCHASING AND MARKETING ORGANIZATIONS. 53 



Length of loans. — Most of the loans made to elevators by banks and 

 individuals are for short periods of from one to four months, or during 

 the heavy marketing season. Forty-one elevators report securing 

 loans payable on demand. Where funds are advanced by commis- 

 sion firms the business is handled on open account and after the year's 

 business is closed final settlement is made. Thirty-five elevators 

 secured loans for improvements on 12 months 7 time. 



Some 14 elevators have an arrangement with the company's bank 

 whereby sums not in excess of a certain amount are advanced to the 

 elevators to take care of the business, interest being charged only on 

 funds as advanced. By using this plan, interest is not paid on a 

 large balance. 



Advances to members on warehouse receipts. — Of 326 elevators report- 

 ing, 62 make advances to members on warehouse receipts. These 

 advances range from small amounts to as high as 75 per cent of the 

 market value of the grain. Two hundred and sixty-four report no 

 advances. 



As a rule, it is considered inadvisable to make advances to mem- 

 bers on stored grain, as a practice of making these advances brings 

 the elevator into a phase of the banking business which can better 

 be done by the local banks. When borrowing frtm a bank, the 

 patron of an elevator is required to pay interest on the borrowed 

 funds although he may object to paying the elevator for a similar 

 loan. He considers that since the elevator is in possession of his 

 grain, it is not entitled to interest on money advanced, which he may 

 assume as part payment on his property. As a matter of fact the 

 advance is not a part payment, but purely a loan, since the title to 

 the grain remains his, and he has been given a warehouse receipt. 

 With all its advantages accruing to the profit of the holder, it is clear 

 that loss of interest to the elevator on the money advanced becomes 

 a charge against all the members of the association to the direct ben- 

 efit of the individual borrowing member, a principle which can not 

 be considered cooperative in any sense. Aside from this, the com- 

 plications in accounting brought about by this practice are unfortu- 

 nate. When patrons require loans from the elevator, such loans 

 should be made an open account, or a personal note should be given. 

 In both cases interest should be charged in accordance with the pre- 

 vailing rate. 



Sentiment and practice with regard to the storing of grain vary in 

 the different States in accordance with the variety of the prevailing 

 crops and the sentiment of the terminal market in which the sales 

 are made. In the southwestern and eastern sections of the grain 

 belt many elevator companies forbid storing, and the practice is dis- 

 couraged generally. In the northwestern grain States storing and 



