The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1901-06-21
PHILLIPS MOVE.
He is ia Earnest in His Desire to 0Start
Farmers Bank.

q USl . Douhs
Minneapolis Journal:
Since his return to Chicago George
II. Phillips, the corn king, has offered
,, to subscribe $780, 900 for stock in a far
mers' bank such as he described in his
speech at the West Hotel banquet here.
He firmly believes in the feasibility of
the scheme and predicts that it will be
! put into practical operation in the
near future On his return from New
York Phillips expects to announce the
working details of the plan. Mr..
Phillips says:
THE criticism of the plan that it
must fail because it amounts to per-
manent corn trust and runs against the
natural law of supply and demand, is
not justified, said Mr.. Phillips.
Underlying the whole project is the
fact that must have become apparent
to all thoughtful observers of the mar
kets, that corn is worth 40 cents a
bushel To maintain its price at the
Accent market would not be to create
an artificial value The United States
has natural monopoly of the produc-
tion of corn. In view of the demand
abroad and its value at home, corn at
40 cents is not high priced. Last year
crop was not only tremendous, but one
of six successive large crops.
%hn ,,,orl>af hrooly fn 0S2
Because corn is worth more than that
entirely apart from any speculative
value. At the prevailing ssprices of
hogs and cattle, corn is worth not less
than 60 cents bushel to feed, and l
have had farmers tell me that to them
it's worth so cents to feed. If this con-
dition prevails--at the end of six-sea-
sons Of. big crops, and..sthe demand is
constantly increasing. what basis
there for the argument that AZ. cents-is
an artificial price for corn?
but such bank as l suggest would
not operate as a trust, but as regula-
tor of the market. tending to keep it
firm and free from panicky conditions.
The farmer who had ample. means to
hold his corn as long as he sees fit
could have no relations with the bank.
But if the farmer has not sufficient
funds to enable him to hold his corn,
he could borrow enough for his tenn
porary needs from the bank. The
bank collateral would be the crib re-
ceipts. The bank would have repre-
sentative in each town whose bust
ness it would be to inspect the grain
and see that it was stored in cribs
where it could be kept for five
years if necessary. Loans could be
made on the basis of 80 cents on the
bushel when corn was 40 cents, Chi
cago value.
1.-THE crib receipts would be in de-
mand and have an established value in
the market. If the management Of the
institution believed corn to be to low
it would send out circulars advising
clients to hold. If this suggestion
caused too many to hold their corn,
an increase in price of few cents
would soon let out enough to adjust
the market. The law of supply and
demand would operate then, as now,
and.there would be no attempt to pre-
vent..its operation.
Mr.. Phillips has. added to his bank
scheme grain company to work in
conjunction with the bank.to build
elevators and widen the market by
pushing into foreign countries. He
says that fnanciers in Chicago with
whom he has talked of the plan infor-
mally have agreed to its perfect..feasi
bility. -
...Minneapolis--- bankers, sslook upon
Phillips scheme as too big to hold to-
gether-. long. They say--that--one 1.-THE
frst.difficulties to be Confronted would
be anssincrease in corn production and
in spite of-PhilIips' optimism they.are
inclined..s.to the. belief that the. corn
bank. would run foul of supply and de-
mand-before-. it....had progressed. far.
None..of- the Minneapolis fnanciers are
at all anxious to assume the manage
ment of such an institution.