The gazette-times. [volume] (Heppner, Or.) 1912-1925, 1921-01-27
FINANCING THE WHEAT
FARMER THRU D. c. c.
By l. A. HUNT, County Agent

ny IA "a ilONlt NOuHl9 agent
Every business man knows that in the
sections where grain raising is the main
business OF the farmer that pay day Is
really only once year and that the
peak load Of credit comes in the har-
vest season and banks and merchants
are both sorely put to it to care for
this situation.
Under our present banking system a
bank may strain its credit so to speak
and discount with the Federal Reserve
Bank for a ninety day period, and un-
less the paper Is reduced it cannot legit-
imately carry 1t for longer time. This
period of rcedit Sraining is common
to every grain growing section and oc-
ours at the same time of year, usually
the most severe about October first.
which is sometimes caIIeu the National
Pay Day. At about this one date many
people must sell their grain in order
that banks may reduce the amount of
paper carried for rediscount and that
business men may be able to make
payments on their bills. Under the
most favorable financial condition this
Is less strenuous but during the last
year and probably for the next one or
two years, as 1t will undoubtedly take
some time for business to recuperate
this will be a very severe test OF the
patience OF the farmer who will be see
ing his hard won bushels of grain sold
upon depressed market
Local banks in any grain section are
o. always hard pressed at this season OF
the year The present plan as advocat-
ed by the director OF the Federal Re-
serve Bank is for the grower to sell to
the grain agencies or spectators. This
puts the money in circulation, cleans
up the paper in the banks in the local
ity OF the grower, and assists local bus
mess generally. but 1t has made no more
money. ground no more flour. The
grain agency has simply borrowed the
money Of some other bank for this deal
and the same Federal Reserve Bank
may be discounting the paper for both
banks The only place then that the
speculator or grain agency has in the
financial scheme Of handling wheat Is
that he goes and uses the same credit
that the farmer has used to grow the
grain which Is the grain itself, to bor-
row the money to clean up the paper at
local banks and has really been Of no
assistance In marketing or in any other
way.
The Oregon Cooperative Grain Grow
ers Association plan is for the Associa-
ton to take the place of the grain agen-
cy or speculator in all of these acts. but
to see that the farmer, banks and the
business men get the benfit Of ready
money in this same way and without
the farmer being forced to dump his
wheat upon the market, but instead to
permit OF the orderly distribution Of
the wheat on the consumers market as
1t is required.
In order to meet these conditions
there are four ways which the asso-
citation has Of getting money, several
Of these which are not available to the
local banking institutions. Every pro-
vision, however, is made to utilize To-
cal banks 80 far as they can function,
but the distinct advantage is that 1t
permits the association to come In and
by its better methods of financing, by
booking credit, to be able to assist To-
cal institutions In carrying this peak
load in Way which IL is impossible