58 BULLETIN" 547, U. S. DEPARTMENT OF AGRICULTURE. 



requires the personal security of directors or members to finance the 

 operations. 



Interest. — Seventy-six organizations report rates of interest as 

 follows : 



Number reporting. 

 Rate, per cent 



28 



10 



3 



7 



20 



1 



5 



2 



6 



7 



6-7 



7-8 



8 



S-10 



10 



12 



The rates of interest vary from 6 to 12 per cent. The two associa- 

 tions paying 12 per cent are badly in need of reorganization, and have 

 had considerable difficulty in obtaining fluids. The money which is 

 procured is used for short periods and commands a high rate of inter- 

 est. The associations on the Atlantic coast and in the Middle West 

 as a rule secure funds at the rate of 6 per cent. Some of the larger 

 organizations on the Pacific coast, owing to the large amounts which 

 are borrowed, and their excellent business standing, are able to 

 secure loans at from 6 to 7 per cent, while the rate which is charged 

 individual producers by the banks is considerably higher. One of 

 the large distributing agencies in the Pacific Northwest borrowed in 

 the neighborhood of $400,000 in one season, most of which was 

 advanced to members for deliveries of fruit. The five organizations 

 which report a 10 per cent rate borrowed small amounts at the time 

 of the year when money in farming communities commands a 

 premium. However, these organizations have an insufficient amount 

 of capital, and from a business point of view are paying more for the 

 money than would be necessary if the organization were better 

 financed and a surplus set aside to help carry the expenses of the 

 early marketing season. 



Length of loans. — Of 74 associations reporting on the period for 

 which funds from outside sources were needed, 21 report that they 

 require outside assistance only during three months, or during the 

 early part of the marketing season; 7 require funds for 6 months; 

 the others vary from 1 to 12 months, but the larger part of them 

 borrow for a short period, or from 1 to 4 months. 



It is possible only during years of good marketing conditions to 

 make advances amounting to a high percentage of the total amount 

 due the grower. In years when markets are bad it is necessary to 

 be very conservative in making advances, as there is a possibility of 

 overpaying. The fruit held in storage may not produce the returns 

 which were anticipated in the early season. In 1913 it was possible 

 for the large distributor in the Pacific Northwest to secure advances 

 on apples. Some banks solicited this business and offered to loan as 

 high as $1 a box at 6 per cent interest on all fruit in storage. During 

 1914, however, when the crop was large and markets were more or 

 less demoralized, it was almost impossible to secure advances from 



