The Washington herald., 1921-10-12
GRANGE MEMBER
SAYS MEASURE IS
BASICALLY SOUND
Five Testify to the Need
Of Improved Fa-
cilities.
DEPOSIT BANKERS
CANNOT FILL NEED
Professor Points Out That
Their Assets Must Be
In Liquid State.

The subcommittee of the House
committee on Banking and Cur
rency resumed its hearing yesterday
on the McFadden rural credit and
multiple insurance bill.
BENJAMIN c. Marsh. managing
director Of the Farmers National
Council; T. c. Atkeson, Washing
representative of the Grange, and
W. B. Boak. chairman of the rural
credit committee OF the Farmers
Institute and director OF the Ma
tionai Farm Loan Associations, ap-
peared In person. and Chairman
MacGregor had read into the record
the printed arguments OF II. c. FIJI
ley. professor of rural economies
at Nebraska Agricultural College,
and william Frear, vice director
and chemist at Pennsylvania state
College.
Agree en- Credit Needs.
All Ave witnesses mentioned the
necessity for improved farm credit
facilities, and all, except Marsh.
stressed the Importance OF the null
tiple insurance feature of the bill.
Marsh criticized the bill in general
and advocated q plan which would
put the government printing presses
to work grinding out corn tas-
sell currency. He had no concrete
plan In mind. He showed his un-
familiarity with the bill he
the provision for censors' electors
for the Insurance companies which
could accept the bill.
Atkeson pronounced the bill
sound economically. but did not
discuss its details. He emphasized
the Importance of using credit for
production only and pointed out
the dangers of commodity credit, or
the use of credit to Withhold COM
modities from the market. Neither
did Boak discuss the details, but
confined his remarks to the general
principles.
Deposits VIII Not sunice.
Prof. Filley emphasized the dan
ger Of employing bank deposits for
agricultural production, in these
words:
The credit needs OF the cornbelr
farmer are not supplied by the Fed
eral Reserve banking system and
cannot be supplied by any ordinary
system of deposit banking. The de-
posit banker must keep his assets
In a liquid state. His deposits are
very largely subject to check and
he must meet the demands made by
the depositors. This means that the
major portion of his loans must
be made for short periods. Ne
braska bankers are suffering al
present because loans were made
for too long q period and because
some OF these loans cannot be read
lily liquidated.
The farmer OF the grain belt
needs money to be used in produc-
tion. II he grows winter wheat
about ten months elapse from the
time that the wheat is sown until
the crop can be sold. An even
longer period must clapse from the
time that preparation OF the ground
is started until Re can realize upor
the crop. The purchase Of a tractor
or other machinery for ground
preparation must therefore be upor
the basis Of one years credit or else
he must plan to pay for them from
other sources. Corn, which II
planted with US late in April oil
early in May. cannot be sold until
December and sometimes not until
later. Seven or eight months ar'
also required in producing othel
farm crops
Likes self-IInspection.
On the superiority of self-inspec
tion over government inspection
Prof. FiIley said:
7 am particularly pleased tha
the bill provides a system Of self
inspection. We have in Nebrask;
a good system Of State inspection
for our banks. Returns made to thu
inspectors have beeh falsifled ant
conditions misrepresented. The out
side man was not in a position q
know many things concerning tn
banks without a long detailed in
spection. As a result we have haC
some serious bank failures during
the past year and have reason T.
believe that there will be yet othel
failures In practically all of thes,
banks there have been either mis-
use Of bank funds on the part o
some of the responsible officers o.
else very poor judgment has beer
shown In the making OF loans.
Sees Fewer Failures.
Had the depositors in these bank
had a system of inspection or hat
thar heen a large number Of stock