The labor journal. [volume] (Everett, Wash.) 1909-1976, 1920-12-24

L
time government credit to farmers
on adequate security to enable farm
ers to market their crops in an
orderly way throughout the year, to
meet consumption demands.
The total resources of the national,
state and savings banks, and trust
companies according to a recent re-
port of the comptroller of the cur
rency, are approximately $53,000,-
100000, while farmers short time
credit facilities are around 81, ,1OO,-
100000. 1t is perfectly clear that
farmers have not been getting fair
share of the credit resources of the
country.
Despite the assertions of the secre-
tary of the treasury and the Federal
Reserve Board, that the farmers have
ample credit, an investigation made
last summer by the Farm Loan Bu-
reau showed a most serious shortage
of short time credit for farmers. Out
of 2,501 national Farm Loan Asso-
Citations reporting only 1,418-a lit
tie over ne-half-reported short
time credit available, 292 reported
no short time credit, 314 fair sup
ply and ATT a scarcity. Even where
credit was available, interest rates
with the exception of two or three
states were from 8 to 10 per cent, in
few cases up to II per cent and oc
cesionally 20 per cent.
The Federal Reserve Board should
meet this situation by requiring that
commodity paper to be subject for
discount by Federal Reserve banks
must be paper properly secured on
which the rate of interest or discount
including commissions charged the
maker does not exceed l per cent in
excess of the rate at which member
banks secure money. 1t can also use
its present lending power amounting
to hundreds of millions and expand
this lending power up to $1,000, ,0OO,-
600 by reducing reserve requirements
on notes and deposits only 10 per
cent.
2. The creation by Congress of
corporation similar to the United
States Grain Corporation to purchase
the wheat crop at the bulk line cost
OF production, and to retain control
thereof and regulate elevator and
milling companies so as to prevent
profiteering until the wheat is ready
as flour in the hands of bakers and
housewives for the domestic con-
sumer. The baking companies il
each city should be regulated by the
city authorities working in harmony
with, and under the advice of the
grain corporation. This corporation
should be directed by board repre-
senting organized farmers, organized
labor, women's organizations, and the
unorganized public.
The Federal Trade Commission in
its recent report on wheat flour mill
ing stated that 10 of the larger mill
ing concerns probably have sufficient
capacity to produce over half of the
wheat flour used in the United States.
1t also reported the average invest
ment per barrel for the 81 companies
thus determined increased from $1.14
in l913-1914 to $1.90 in 1917-18 and
profit per barrel from IA cents to 65
cents" This is nearly 400 per cent
increase.
A United States Grain Corporation
administered not by agents of mill
ing trust and elevator combine, but
by people anxious TO serve the public,
should prevent most of the profiteer-
ing by brokers, elevator companies
and flour mills. Congress should ap-
propriate the necessary revolving
fund
3. The enormous contemplated ap-
preparations for the army and navy
aggregating 81 1,633, ,991 1874 should be
reduced to one-half that amount and
the other half used to finance the
export of surplus wheat and wheat
flour, potatoes, cotton, wool, meat
and meat products, dairy and dairy
products, and tobacco to Europe
These products should be purchased
at bulk line cost of production plus
fair profit, our government to as
sumo the risks of collection and to
secure payment therefor as soon as
the resumption of industry and COM
merce in the European countries, to
which crops are exported, permits.
We clearly need to send food and
clothing to the starving peoples of
Europe and it is safe to say that a
few million bushels of wheat and a
few million pounds of meat and dairy
products will do more to keep the
peace than an extra superdread-
naught, or an extra thousand soldiers.
These two plans will stabilize farm
prices, enable farmers to purchase
necessary manufactured products and
tend to restore hope and hence order
in Europe. The government would
be obliged to issue treasury certifi-
Gates Of Indebtedness, of course in an
ticipatiCn of collection of taxes to
carry cut this plan. 1t is, however,
in our judgment the most practical
way to enable farmers to export sur
plus of the crops mentioned above,
at the minimum of expense, maxi
mum of profit to farmers, and lowest
prices to foreign consumers.
The War Finance Corporation
which will doubtless be rehabiltated
by Congress will not itself assume
any risks but if it is to do any con-
siderable amount of business will
have to go into the market and bor-
row money to be loaned to banks or
syndicates of banks which under
write the exports and which assume
all risks of shipments of farm staples
to Europe. These banking syndicates,
just like the export CORPORATION re-
Gently organized at Chicago will
charge very heavy commissions to
cover the risks of their undertakings.
1t will be weeks doubtless. before
financial arrangements can be. made
either by the War Finance Corpora
tion or by the export corporation or
ganiZed at Chicago to begin export