Cheraw chronicle. [volume] (Cheraw, S.C.) 1896-2005, 1921-08-11
Agricultural Credits.


named five Observation-Disclosures
Capper, Secretary Hoover recently
named five kinds of credit needed by
the agricultural industry. OF these,
beyond the farmers own capital, all
are he says, partially covered by
present credit machinery and some
of them fully" The five kinds named
are:
Loans up to six months for either
production or marketing annual pro-
duce,
Loans between six months and
twelve for the purposes,
Loans from one to three years for
producing and marketing of cattle.
Loans from one to three years for
farm equipment.
Long term loans for purchase and
Improvement
OF these the first and, in normal
times, even the second, are partially
or fairly well, covered by the present
banking system, though, as Mr.. Hoo
yer points out, the Federal Reserve
system being a mobilization of the
demand deposits of the country, they
cannot be called upon for loans of
over six months on agricultural pa
per without jeopardizing the whole
commercial banking structure" The
deposits of banks must be readily
available for payment at any time
and one of the peculiar conditions as
to agricultural loans is that the Gre
dit demand is largely seasonal, COM
ing in bulk at about the same date.
55Pis chiefly then q seasonal demand
dni even six months is a longer pc
tiod than is warranted as a practice,
by commercial banks.
These, also, are largely what are
in fact consumptive credits. They are
such as show lack OF available CAPT.
tailor the use of such in some form
of farm investment They should be
restricted as far as possible as bank
ing credits. Yet this need has never
been acute beyond the ability OF the
present banking system to fairly we'll
meet it in we'll developed and pros
porous farming sections until this
year with its emergency conditions.
1t is never possible to meet it through
banking channels in the newer settl-
ed regions.
The last named type OF credit is
now sufficiently covered by the land
loan bank system. This leaves but
the third and fourth unprovided for
save 10Y emergency provisions and
they are both credits for production.
These are loans for buying, or in
vestment in personality which is rea-
sonably certain to pay back the loan
with a profit. Cattle, farm machine
ry, cows, pigs, explosives for clear
ing land, fertilizers and the like vii
of themselves, not alone pay their
cost in added production or price,
but they will thereafter have a con-
tinuing, or remaining value (which
becomes an asset, or ctpital.
1t is such credits, those for which
no adequate provision is now made,
that cover the whole field of in
creased agricultural production. They
are all subject to security through
insurance. With such collateral, they
become among the very safest OF
loans. 1t is this type Of credits, Sc
cured in this way, for which the Nc
Fadden-Kenyon bill provides. 1t
makes this the most important agri
cultural measure before the present
Congress and one whose passage will
he of the utmost value to agricul
ture.
There is another result OF this
measure which will be helpful TO
commercial banking. Those familiar
with ordinary farm management and
the average farmer who is slOvent
and good credit, recognize general
Weakness in the usual agricultural
financial process. When farmers sell
their products and have cash in
hand, instead of saving enough to
carry them through to the next crop
wear, they have habit of using too
much of it to buy something needed
on the farm. They do not indulge