The Mena weekly star., 1921-08-04
WIDER RANCE OF
 FARM AID URGED
Improved Credit System Seen as Az riculture Aid--Five Types of Loans Outlined by Secretary Hoover
 and New Needs Cited.
From the Washington (Dl O Herald.

From the Washington CD. O Herald
 Washington, D. C., July 27.-Agri- cultural credit facilities and their bearing upon the present distressing problens of distribution of farm pro ducts, are outlined in letter from Secretary of Commerce Hoover to Senator Arthur Capper, in response to the latter's request for the secretary s suggestions.
 Mir. Hoover said he believed that if competent inquiry were made, It would prove that great deficiencies lie in our agricultural credit organi- zation in the systematic provision for those needs mentioned between the terms of six months and three years; that is, credits that fall outside the area of both the Federal reserve and the Federal farm loan banks.
 Types of Credit Needed.
 The Secretary in his letter outlines the types of credit needed in the agri- cultural industry as follows
 Loans up to six months for either production or marketing annual pro- duce.
 Loans between six months and twelve months for these purposes.
 Loans from one to three years for producing and marketing of cattle.
 Loans from one to three years tor farm equipment.
 Long-term loans for purchase and improvement.
 'sObviously, all of these needs are partially covered by the farmers own capital,h he said, land all of these fields are partially covered by present credit machinery, and some of them fully. All of these credit areas are suffering in various degrees because the present war-born famine in capi- tai just as are also building, railways and other industries. This situation is getting steadily better with liquida- sscn of high prices. and therefore q reduction in the total value of capi- tai needed.
 Jeopardize Bank Structure.
 Reorganization of farm credits up to six months are covered by the Fed eral Reserve system, and it's smooth working depends only upon the mem Der banks and the Reserve boards. This system, however, being mobili zation of the demand deposits of the country, cannot be called upon for loans of over six months on agricul- tural paper without jeopardizing the whole commercial banking structure upon the safety of which the farmer is greatly concerned.
 "The long-term mortgage loans are with the alternations proposed in Congress well organized thru the bal ance wheel of the Federal farm loan banks. Some farmers could provide more of their needs in other directions if they would take greater advantage of the system instead of reliance upon short term loans.
 Il am convinced that six months is too short for farm paper in great nufAber of cases. The farmer often has to borrow from planting time to some months after harvest unless his produce is to be forced into the mar kets just after harvest instead of over the crop year. This matter has added importance at the present time be- ~aNot VI taN ItCtut hSaty iuSSeS 70 the farmers, because the poverty of foreign buyers tends to delay their buying until their own crops are ex- 'hausted, and thus necessitates our farmer holding on longer unless he would depreciate his price. Cattle ob- viously cannot be handled on six months credit. The alarming increase in tenant farming gives warranty for execution Of credit facilities for equipment thru which he might be Aelped into an ownership.
 Mobilize Private Capital.
 We have been endeavoring to meet temporary and acute situations by mobilizing the private capital such as the cattle and cotton pools. 1 believe some sort of definite organization should be set up for pobilizing credit to cover shortage in this special area in the same sense that the Federal Reserve organizes very short credits, and the farm loan banks mobilize long mortgage credits Such credits should be supplied from investment capital of the country rather than from the commercial pool Such a pro- posal is not paternalistic any more than are the other two systems. As to the precise method, whether by or- ganizing a new department in the Federal farm loan banks, or other wise, requires much thought and in- vestigation, but such a system is, I believe, needed and is entirely feasi- ble."
 Secretary Hoover's statement that the Federal Reserve svstam ranno+ ha called upon for loans of over six months on agricultural paper without jeopardizing the whole commercial banking structure is exactly what the American Farm Bureau Federation has been claiming" stated ]. R. How ard, its president, commenting upon the recent letter from Secretary Hoover.
 OKLAHOMA BOASTS