Imperial Valley press., 1913-12-20
FARM CREDIT LEGISLATION
TO FOLLOW CURRENCY LAW

Washington, Dec. 20.--With the
currency reform bill about to be en-
acted into law, the president and con-
gress will devote themselves to the
early creation Of a system of agri-
cultural credit. The first steps in this
direction will be taken in few days,
when there will be submitted to both
houses the report of the national COM
mission which investigated the sub
ject, together with a bill prepared by
the commission which has received the
approval Of the president.
According to the commissions re-
port agricultural credit naturally di-
vides itself into two great classes,
namely: Long time or land mortgage
credits, which is defined as credit to
meet "the capital requirements of the
farmer" and short time or personal
credit, which is defined as "credit to
meet the current or annually recur-
ring needs of the farmer"
In the European system of agricul-
tural banks the distinction between
these two classes of credits is sharply
drawn. In considering the question
of whether the conditions in our coun-
try demand segregation of institu-
tions designed to meet these two
classes of credits, the commission at
temped to define in the first place
the needs of the American farming
population in a financial sense.
The farmers capital requirements
are described as his need for large
sums of money to be used in aiding
him to pay the purchase price of the
farm, improvement of the farm, such
as construction of buildings, drainage,
irrigation and clearing, or the equip
ment of the farm, SO as to bring his
operations to the highest state of eff
cheney.
The money needed for these pur-
poses must be in the shape of a more
or less permanent investment or in
the shape of loans extending over
such long period of time that they
can be reduced gradually and paid off
out of the increased earnings derived
from the improvements.
The farmers temporary require
ments, by which is meant the money
needed by him to finance his opera
tions during the time the crops are
being produced, may call for short
time credit, ranging from ninety days
to one year.
In the opinion of the commission
the report says, these two general
classes of credits must be largely seq
Iregated, although the two systems will
naturally touch at many points. Fur
ther, in the judgment of the. commits
sion, the development of land mort
gage system of banks is the most i'm
portant and the primary step to be
taken in order to improve our agricul-
tural credit conditions.
In this country it is necessary, it is
urged, to create land mortgage Sc
curity which will be entirely liquid
which will run for long time, which
can be paid off in small annual or
semiannual installments and which
will enable a man owning farms to
use most advantageously his best
banking asset-land-as the base of
credit.
1t is claimed the system proposed
protects the borrower yet attracts
capital. 1t will attract capital because
of the adequate and ample return
which that capital will obtain. 1t will
protect the borrower, because the
amount of interest which the bank can
charge of the borrower is limited to
per cent more than the bank pays
on it's land bank bonds. The admin
istration charges of the bank are con-
fined to a given maximum.
The whole system is designed pri-
marily in the interest of the farmer
and secondarily, so as to offer return
on capital invested.
Wanted, stock to pasture. Ed.