The labor journal. [volume] (Everett, Wash.) 1909-1976, 1920-10-08
SHORT
TIME CREDIT

| (By The Farmers National Council,
Bliss Building, Washington, ID. Co.
! Farmers Denied Credit or Compelled
to Pay Ex0rbitant Charges Cost of
Credit Now Big Item in Farm Pro-
duction, Additional Credit Not
Needed TO Meet Farmers Needs
But Transfer of Credit FrOm the
IiOarders to Producers.
Last May and June the Farmers
National Council in cooperation with
representatives of the National Board
of Farm Organizations, the Ameri-
can Farm Bureau Federation, and
the National Grange made a vigor-
Gus campaign to secure deposit of
government funds in the reserve
banks to be used for re-discounting
cattle paper to protect and encourage
the live stock and other agricultural
interests of the country engaged in
the necessary production of food. At
the councils request a joint resolu-
ton was introduced in the senate
directing the secretary of the treas
ury to deposit forty million dollars
In the federal reserve banks to redis-
count at not less than 6 per cent
for such purposes.
The secretary of the treasurer,
formerly secretary of agriculture,
opposed this resolution, and in let
ter to Senator Mclean, chairman of
the senate committee on banking
and currency, said:
81 am very much opposed to the
resolution. 1t is evidently based
upon an utter misapprehension of
the nature of the federal reserve
system and it's relation to the treas
uTy. Federal reserve banks are
entirely competent and able to pro
vide the necessary funds for the
livestock and other agricultural in
terests of the country"
The attitude of the secretary of
the treasury blocked this effort.
During the summer farmers credit
situation has been growing increas-
ingly difficult until today farmers
can get practically no credit at less
than 9 to 10 per cent including costs
while many are paying as high as
II per cent and often cannot secure
credit even on the best of security
on any terms. Recently, representa-
tives of the American Cotton ASSOC
station and of live stock and bank
ing interests from Chicago appeared
before the Federal Reserve Board
asking for extensions of credit. They
were urged to go home and ask their
local bankers to help them out.
Farmers Representatives Fail to Sc
cure Relief.
Representatives of the farm or
CARNATIONS with headquarters at
Washington had conference with
the governor of the Federal Reserve
Board asking similar relief and were
informed that the Federal Reserve
Board had no power or discretion
under the law as to making loans.
He said that through the efforts
of the board close to billion dollars
of loans made by eastern banks for
speculative purposes had been called
in within the last few months and
the banks had been urged to send
money west for discounting and re-
dlscounting cattle paper, and other
agricultural paper and to help the
movement of crops. The governor
was urged to extend this plan as
far as possible and to request the
member banks in agricultural dis
tricts to exert every effort to meet
the agricultural needs of their COM
munitieS.
Governor Harding in his speech to
the Cleveland Chamber of Commerce
on September 16, 1920, stated that
the bills discounted by the Federal
Reserve Banks in the south and
west, directly in support of agri-
culture and live stock interests
amounted on September 3, 1920. to
$3O5, 25O,00 including $4,000, 900
(nearly half of this amount) of
loans made directly or indirectly to
banks in strictly agricultural sec
tions," by the Chicago Federal Re-
serve bank. The farmers direct loans
for the eight reserve banks at Rich
mond, Atlanta. Chicago, St. Louis,
Minneapolis, Kansas City, Dallas,
and San Francisco, including the
S142,000,000 noted above, was only
ia per cent-about -ninth-of
VIZ Ioloi value VI DlllS DIV
the reserve banks on September 10,
1920.
The governor did not state what
percentage of the bills discounted by
the Federal Reserve Banks of New
York, Boston, Philadelphia and Cleve-
land were directly and indirectly for
agricultural purposes. Doubtless
there is considerable amount but
even at the most liberal estimate
the maximum loans directly to farm
ers probably amounts to only about
% per cent, about one-fifth of the