Edgefield advertiser. [volume] (Edgefield, S.C.) 1836-current, 1921-08-17
Agricultural Credits.

IA v AN VI S3Se2O
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 from n 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..
Hoover points out, the Federal Re
serve system being a mobilizationSof
the demand deposits of the country;
they cannot be called upon for loans
of over six months on agricultural
paper without jeoparding 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, CONF
ing in bulk at about the same date:
1t is chiefly then>a seasonal demand
and even six months is a longer PEI
Rod than is warranted as a practices.
by commercial banks. 8
These, also, are largely what are
in fact consumptive credits. They are
such as show lack of available capt.
tai or the use of such in some form
or 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 well
meet it in well developed and pros
porous farming sections until this
year with it's emergency conditions:
1t is never possible to meet it through
banking channels in the newer set
tied regions.
The last named type of credit is
now sufficiently covered by the land.
loan bank system. This leaves but
the third and fourth u%nprovided for
save by emergency provisions and
they are both credits for production.
These are loans for buying, Or in
vestment in personality which is a
sonably certain. to pay back the lean
with a profit. Cattle, farm machin-
cry, cows, pigs, explosive for clear
ing land, fertilizers and the like will.
of themselves. not alone pay their
cost in added production or price,
but they will thereafter have a con-
tinuing, or remaining value which be-
comes an asset or capital.
1t is such credits, those for which
no adequate provision is now made,
that cover the whole field of increas-
ed agricultural production. They are
all subject to security through in
surance. 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
be of the utmost value to agriculture.
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 a 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 year,
they have a habit of using too much
Of it to buy something needed on
the farm. They do not indulge in lux
uries, but in productive needs Of what
they feel to be needs. They will buy
a machine of some kind cattle, hogs,
or other livestock, something by
which they may increase income. FIRE.
quently they do this while renewing
notes at bank, if banking credits are
seeking a market. They do it to an
extent which assures a demand for
credits for consumptive needs.
If this new credit system was in
operation with a low interest rate,
farmers would use it for such pur-