The Oakes times. [volume] (Oakes, N.D.) 1906-current, 1921-09-01
RICH DEFENDS
GRAIN FORECAST
Chairman Of Minneapolis Federal Re-
serve Bank Estimates Grain
Crop in Ninth District
.lss. 900. 100000 IN EXCESS LOANS


slss. 600. 100000 IN EXCESS LOANS
Paying on Debts is Called Soundest
Policy
John H. Rich, chairman of the Min
neapolis Federal Reserve bank, in q
signed statement upholds a previous
estimate Of 80O,OO0,00O bushels Of
grain for the 1921 crop in the ninth
district. His previous statement had
been attacked as inaccurate in state
ment issued jointly by N. j. Holmberg,
commissioner of agriculture for Min
nesota, the Minnesota Far mBureau
federation, and P. F. Trowbridge, di-
rector Of the North Dakota agricultur-
al experiment station. The jointly is-
sued criticism declared the estimate
was too large and was "colored by
desire to force liquidation" lit said
the deduction that the crop would
bring about substantial liquidation
was wrong. The critics declared the
remedy was an increase of credit
Mr.. Rich called an increase of credit
now a sleeping potion" and said the
sound policy is to encourage borrowers
generally to pay of their debts as the
crops move. He said the 0,OOO, 900
crop should be able to produce effect
i've liquidation, reduction in the dis
trict's interest burden, give encour-
agement to lower interest rates and
lend hope of improvement in general
business.
"My attention is called to various
criticisms Of the recent crop estimates
Of the Federal Reserve bank Of Minne-
apolis," Mr.. Rich said in his state
ment, indicating an aggregate pro-
duction over the ninth district Of 146,-
100000 bushels Of wheat, 302, ,04O, ,O40
bushels Of corn, 228, 100000 bushels
Of oats, 23,714,00O bushels Of rye, g.
666, 900 bushels Of barley and $780,
900 bushels Of potatoes, or an aggre-
gate production Of 798, 100000 bush
els, having prospective value on the
basis of the present market Of approx
inaately $500, 100000.
Il am unable to comment upon the
force and accuracy of the data upon
which they are based. They may, per-
haps, be based partially upon assump-
tion or partially upon particular con-
ditions in particular state. The es-
Inmates of the Federal Reserve bank
as given above cover the territory en-
bracing northern Michigan, the north
western one-third Of Wisconsin and
the states of Minnesota, North Dako-
ia, South Dakota and Montana. They
are compiled from detailed reports
submitted by 993 banks, many Of
which have been rechecked in the in
terest of accuracy and completeness.
On the basis of the information thus
obtained from every county in the
ninth district that is an important
producer Of the crops mentioned, and
from supplementary data received
since the publication of the first re-
port, l am inclined to think that there
is no reason for any correction or
change in the estimates as previously
announced. ~aFj
''The Federal Reserve banks fip.
ures were derived by an entirely dif-
ferent method than employed by the
department of agriculture in it's esti-
mate of Aug. 1, and yet the aggre-
gate results as compared with the de-
partment Of agriculture figures are
about the same. The variation does
not exceed one per cent This is suf-
ticient evidence of the substantial ac-
curacy of the estimates.
"1n addition to the employment of
their normal loaning casacity, banks
in the Ninth Federal Reserve district
are carrying today an excess load Of
$198 900 900 of borrowed money which
they have brought into their commun-
tiles and loaned to the farming and
livestock interests. To this date the
loans Of these banks, to very con-
siderable extent, are frozen and un-
liquid, by reason of which condition
many banks have been deprived Of
their former freedom in making new
loans. Their ability to serve the
farming and other interests of their
community has, thereby, been very
seriously impaired.
This frozen condition has contin-
ued with no very marked change and
with total absence of any general
liquidation, for more than 20 months.
The interest charges on the overload
which the banks are carrying amounts
to not less than $13,5OO,OOO per an
mum, and this interest charge is be-
ing paid by the farmers and stockmen
who have borrowed but have not re-
paid the banks. There is no hope of
normal banking service until this
overload is wiped out and the country
banks of this district have recovered
enough of their normal loaning power
to promptly meet all worthy applica-
tions for new loans.
"The ability to loan freely is the
keystone to the agricultural credit
situation, which can in no wise be
ameliorated by further credit exten-
sions. Agriculture and livestock have
,hcnrbnj ond fro,a, ,,~ <Oo ,s~ook I.