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 
8-10 
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 funds. 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 
