New Ulm review. (New Ulm, Brown County, Minn.) 1892-1961, 1916-04-05
RESERVE BANK IS ., :. =.
BOON TO FARMERS
HAS HAD TENDENCY TO ALLEV-
late STRESS DURING CROP
MOVEMENT.
VALUE OF CUSTOMERS CREDITS
BEING REALIZED BY DE-
SITORS.

Bankers have come to the conclusion
that the federal reserve bank at Mime
apolis has been boon to the farming
communities, as it is estimated that 80
per cent of its $6,161 900 rediscounts
during the past sixteen months has been
for country banks, and the great bulk
of the collateral given on loans has been
farmers paper.
This result, reserve bank officers
poXlt out, has been the natural out
growth of the conditions of 1915, and
those which have so far prevailed in
1916, says the Minneapolis Tribune.
The pressure on banks in commercial
and manufacturing centers has been
light. Few situations have developed
that local banks, carrying heavy de-
posits and large excess reserves, could
not readily meet. In the country, con-
ditions have been different. The foot
and mouth quarantine, planting and
harvesting demands, and the failure
of the corn crop have been the flaws in an
otherwise unusually favorable agri-
cultural record, and, in the localities
affected, have compelled farmers to
borrow freely and created considerable
demand on country banks. The re-
sulting paper, specifically provided for
by the liberal agricultural provisions of
the law, has constituted by far the
larger part of the average of $4,000
per month taken by the reserve bank of
Minneapolis since organization. The
average rate has been lower than that
at which farmers paper has been dis
counted in any previous year.
An incidental result of this unex-
pected development of business with
the agricultural sections, and one which
will be immensely valuable in time to
both farmers and country banks, has
been a slow but gradual movement to-
ward the establishment of customers
credit files in the rural banks. The
reserve bank requires, with each farmers
note presented for rediscount, a state
ment showing the assets liabilities and
net"worth Of the farmer who made it.
AS the use of signed statements grad
ually extended, farmers were quick to
see the advantage of having sure and
substantial foundation for their bank
credit, and the practice of making state
ments regularly, similar to those re-
qulred Of commercial enterprises, is
rapidly growing. No paper is now re-
dEcounted without such statement,
(the practice having been more widely
adopted in this than in any other reserve
district.
The 1916 outlook is for light redis-
counting by banks in commercial and
manufacturing centers. Liberal orders
and good collections have placed bust
ness concerns and industrial activity on
a very solid basis. In the country there
promises a somewhat different situa-
ton. Over the grain territory there is
a considerable shortage of fall blowing.
Sound seed corn is scarce. There will
be great activity as soon as spring opens
up, and in the western portion of the
district a more active demand for funds
for farm operations than a year ago.
The stock situation through the central
part of the district is uncertain. Poor
feed and good prices have made heavy
inroads upon the cattle and hogs on the
farm, and it is predicted that the coming
season will force movement to replenish
livestock