The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1920-11-20

Manufacturers Record, Baltimore.)
There is being formulated in Wash
ington, under the leadership Of Asbury
+. Lever, Of :he farm loan board.
bill devised to furnish the farmers
Of the nation with the capital essen
tia! year by year for the orderly mar
kcting of their crops. The principles
on which the bill is being framed, as
we understand Them. appear to have
great merit, and we look to the legis-
lation proposed as likely to be of the
very greatest value to agriculture.
The Federal Reserve act did not
properly or adequately differentiate
between general business and agri-
culture. This has been detrimental to
the latter, which has financial prob
lens peculiar TO itself. The farm
loan banks, on the other hand, while
representing Il great advance, were
provided merely to furnish loans to
farmers on general farm mortgages.
They are land banks and accept real
estate only as @ecurity for loans. They
do not, therefore, offer financial fa-
cilities TO farmers WhereWith to han
die their crops
The Federal Warehouse act, for
which Mr.. Lever Was responsible, is
only beginning this year to be taken
advantage Of. But it also lacked one
feature-namely, some method where
by the commodities warehoused
could be financed other than by in
dividual effort at local banks.
What Mr.. Lever proposes to do now
is to extend the principle underlying
the Farm Loan banks to the operas
ton OF organized warehouses. He
| proposes, as we understand It, to di-
vide these warehouses into geograph-
ical or commodity groups, with a
! board of trustees i'm charge of each
| group. These boards of trustees
would then offer for sale short-term
securities, based on the value Of the
warehoused commodities, up to say,
60 per cent Of the total crop value.
These short-term securities would
have all the financial standing that
present bonds Of the Farm Loan banks
have, the only difference being that
they would be based on commodity
values instead Of lanG values There
is every reason TO believe that in
vestors generally, as we'll as banks,
would be in the market for these
short-term certificates, which could
be made extremely attractive, both
| from the viewpoint OF return and Sc
curity.
The plan is an exceedingly simple
one, as most good plans are, and APP
pears also to be fooi-proof. The fac,
4 hnnn
cially and economically sound by Sec
retary Houston might arouse some
prejudice against it, but even Homer
sometimes mods, ana we suspect that
the secretary's approval will not be
| fatal.
| The Federal Reserve board now
yearly cries in pain at the thought OF
! having to provide funds for the crop
movement, and the financial idea is tC
move the crops with the utmost speed
possible, keeping the money in the
agricultural districts for as short pc,
/ riod as possible, anG bringing both
tcrops and money back to the me,
trOpolitan centers in a few shor
weeks. The Lever scheme would take
the crop movement partly out of the
|
| modify values the year round, at the
same time bringing general invest
ment funds into the market fol
handling the crops. 1t would brins
about financing of the crops by the
nation, not the government, and the
| financial resources of the natior
would be more thar ample for the
task. 1t would mean scientific in.
stead of haphaZard financing.
Agriculture has needed to employ
the business methods common among
big corporations, which involve huge
! credit resources, ability to market
intelligently and star dardiZed meth
Ods of handling. These things cor
be brought about by operation of IN,
| Federal Warehouse act, supplemented
by the very simple but obviously feas
ible financing scheme Mr. Lever ha.
worked out.
| The bill has not been finally for.
mulated, but is still in the process
OF framing, is open to amendmen
! and suggestions concerning tit will
| gladly be received, we are confident
|