The Columbia herald. [volume] (Columbia, Tenn.) 18??-1935, 1921-08-19
EXHAUSTIVE ssloN OF SUB.
JECTl MADE BY MEMBER
FEDERAL LOAN BOARD.
the BUSINESS OF PRODUCTION
Factors that Enter Into the Growing
OF Crops Their Final Sale Are Ex-
planned to the Middle Tennessee
Farmers.
(From Fridays Daily Herald.)

SOnal security We're made the SupJect
of an able and very interesting ad.
dress from W. H. Joyce of the federal
farm loan board at Louisville. After
discussing the farm loan system
through which loans are made alto.
! gether on the security of lands and
: their improvements Mr.. Joyce made
! the following observations on credit
needed for crop production and mar
/ keting and which is not furnished by
! the federal farm loan banks:
1.-THE credit needed for crop produc-
ton is the most perplexing problem
in agricultural finance, and it is, diff,
cult to see how there can be any
Governmental means of Improvement.
J The anticipated crop furnishes no
! real commercial basis of security.
.. Loans for crop production, therefore,
must be based in large degree on
the factor of personal charcter, and
unfortunately no Governmental plan
of supervision can take the personal
equation into substantial account
This can. only be done by the man on
the ground, the banker or merchant
who is acquainted with the character,
habits, or methods of the individual.
There is probably room for improve
ment in the attitude of the bankers
towards this form of credit, but l
believe that considering the limita-
tions under which he must operate,
the country banker is genrally respon-
size to the demand II, with due re-
gard to the integrity of his institu-
ton, the banker is not responsive to
the legitimate needs of the community
in which he lives, he is failing in his
public duty and retarding the develop
ment of his own community as well as
! his own business. All of us know
/ that during the last few months es-
pecially, the country banker has been
absolutely unable to fully meet the
needs of the farmer, usually through
no fault of his. A pursuit of this
subject however, would bring us In
to the discussion of World finance,
European market conditions, and fun
damental economics generally, and
shall not undertake it.
Let me explain, however, that
very substantial part Of the funds we
are loaning to farmers, isl reaching
the country banks and every dollar OF
debt which the farmer discharges with
his local Cank or merchants, is a re
lief to the entire situation. 1t is es-
timated that each dollar Of cash will
liouidate at least $500 of debt. The
| merchant and the banker use the
money paid to them by the farmer,
through the proceeds of his loan, to
discharge their own debts. The whole
saler and the city banker use this
same money to discharge their debts,
and it gradually finds it way back to
the large reservoirs of the country,
and becomes available for the pur-
chase of our Farm Loan Bonds. Thus
the finaLcial cycle is established, and
thus it is apparent that little real
money will go long way and perform
many important services, Do not
overlook the fact, ALSO that, every dol
lar which comes in your, community
through the medium of Farm Loans, is
usually brand new capital flowing into
your local channels OF trade, for it
cones from the people who buy Farm
Lean Bonds, the people who have idle
capital for investment and such peo-
pie during the past year or so, at
least, have not been farmers.
To my mind the most important
question to be considered and one
| which is capable of ultimate and sat
isfactory solution, is that of financing
the farmer for crop carrying and mar
| keting. Very recently Senator Capper,
| of Kansas sent letters TO the lore
most students of economics of the
country, asking their suggestions for
the best methods of meeting the farm
credit situation. In his response to
this inquiry Secretary Hoover says he
believes some sort of definite orgapl.
cation should be set up for modifying
credit, in the particular direction OF
financing farmers for length of time
necessary to take them through the
crop harvesting, carrying and market |
ing period. He points out that the
federal reserve system. is competent |
to take care of the very short credits |
and the farm loan system to mobilize |
long mortgage credit He does not of
fer any exact plan by which this cred
it might be realized, but says that the I
question requires much thought and
investigation and that he believes this
credit is needed and that practi-
cal organization is entirely feasible.
Mr. Joyce then entered upOn a dis