East Oregonian : E.O. (Pendleton, OR) 1888-current, 1914-12-25
Build now.


way.
Build now
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In his annual report the secretary
of agriculture goes into details with
reference to the new
Reserve Banks federal reserve banks
And Farming. and their relations
to the farming bus
mess. A portion of his report is so con-
sise and interesting that it is here
given verbatim:
When the national banking law,
commonly called the federal reserve
act, was under discussion in congress
the matter of farm credits was con-
sidered and debated. but it was de-
cided that the subject as a specific
program should be separately dealt
with in another act. The federal re-
serve act was passed with view to
the improvement OF the banking con-
ditions Of the country in the interest
OF all classes; to the restoration of
normality in banking; to the estab-
lishment OF reserve or banking pow
er which could be utilized in times
Of emergency; and therefore with a
view to secure good banking at all
times and to prevent panics. 1t is not
a bankers law or a business mans
law or a manufacturers law or
farmers law; 1t is a law for all class
es-for all the people. However,
there were Incorporated into the act
several very important provisions
which had in mind specifically the
needs of the farming classes and the
possibility of extending banking IA
cilities to the rural districts.
1t was specifically provided that
federal reserve bank might discount
notes. drafts, and bills of exchange
arising out OF actual commercial
transactions-that is, notes, drafts,
and bills Of exchange issued or drawn
for agricultural. industrial, or COM
mercial purposes, or the proceeds of
which have been used or are to be
used for such purposes The fed
eral reserve board was given the right
to define the character of paper thus
eligible for discount. 1t was further
distinctly provided that nothing In the
act should be construed to prohibit
such notes. drafts, and bills Of ex-
change secured by staple agricultural
products. or other goods. wares. or
merchandise from being eligible for
such discount" It was provided that
the ordinary notes. drafts. or bills
admitted to discount should have ma
turity at the time Of discount or not
more than 80 days, but that notes,
drafts and bills drawn or issued for
agricultural purposes or based on live
stock might have maturity not ex-
ceeding six months. Not only is pa
per arising out Of agricultural tran
sactions made eligible under the act.
but Il Is given a longer maturing
period than other forms of paper.
This apparent discrimination arose
naturally out OF the fact that agricul-
tural operations are seasonal and in
yolve a longer period than ordinary
commercial transactions.
Again, II is provided in the act that
national banking associations not sit
uated in the central reserve cities may
lend on improved and unencumbered
farm lands within the federal reserve
district, and that such loans may be
made for any period up to five years
Such loans may not exceed so per
cent OF the actual value OF the prop
erty. Any national bank under this
provision OF the act may lend on
farm lands an amount in the aggre-
gate equal to rs per cent Of its capital
and surplus or one third Of it's time
deposits. The federal reserve act
therefore. 80 far from discriminating
against the farming classes, distinct
ly bears them in mind. and while not
discriminating in favor Of them takes
just and particular knowledge Of their
requirements.