Omaha daily bee., 1921-08-28
Congress S
.ToCo1lsider
'FarnnRelief
McFadden Kenyon Rural
Credits Bill One of First
Measures to Come Up
After Recess.
Plan Success in England
BY GRAFTON S. WILCOX.
Chicago Tribune Omaha Rec Ieased Wir.,

BY GRAFTON S. WILCOX.
Chicago Tribune Omaha Bee Leased Wire.
Washington. Aug. 27.-Congress,
when it resumes the special session
in October, is to devote special at
tention to the growing necessity for
agricultural relief and one of the
measures pending which will be
given renewed consideration is the
f@dc Fadden- Kenyon rural credit and
multiple insurance bill, which has al
ready had preliminary hearing be.
Eore the house subcommittee on
! banking and currency and the joint
commission OF agricultural inquiry.
The bill designed especially to
provide capital instead of credit for
agricultural production and every
witness who has thus far appeared
for the measure has emphasized the
danger of substituting credit for
capital in the financing of agricul-
tural enterprise.
The time required for agricultural
reproduction is too long and where
bad banking practice is employed,
the credit stream becomes clogged,
thus percipitating financial crises
such as have occurred recently.
Much Interest Shown.
The interest manifested by con-
gress is illustrated by an incidental
reference to it by Representative
Ogden L. Mills OF New York,
member of the joint agricultural
committee, in his speech on the
revenue bill.
Let me call the attention of
gentlemen from the rural districts
to this proposition" he said. "Inside
of three months this house will be
considering a proposition to provide
farmers with credits running from a
year to two and three years, because
there exists we'll recognized gap
III our banking system. The ordi-
nary sources of credit, the short time
s.sbmmereial credits, do not meet the
situation. because these mature or
d;narily in from so to 90 days, while
the farmer needs from nine to II
months and the cattle raisers up to
three years credit. 1t is not proposed
by gentlemen who have studied this
proposition aud who will advocate
the measure, to tap the commercial
fund of the country. They propose
to tap the investment fund and
properly so. I would point out to
them that it is going to be mighty
difficult to tap the investment fund
Of the country if you drive that IN
vestment fund into tax-exempt Sc
curities, or if you propose to take it
TO the tune OF 20 per cent to pay
government expenditures"
Two Corporations.
The McFadden-Kenyon bill pro-
poses to create two corporations, a
rural credit society with central
bank, 4S branches, one for each state,
and any number OF community as
sociations composed of farmers and
one multiple insurance league, both
Ey separate federal charters. The
multiple insurance charter is broad
and liberal, authorizing the corpora
ton to insure against any contlng-
ency just as is provided by the char
ters of many of the British insur-
ance companies, some OF which have
operated more than two centuries. II
is proposed to induce one OF the big
life insurance companies to accept
this federal multiple insurance. char
ter and surrender its state charter.
The multiple insurance league. IS
to serve two purposes, first, to fur
nish sound and cheap multiple in
surance TO the members OF the
credit society, as security Tor credit,
and second, to become a guaranteer
OF the credit society itself, by fur
nishing the capital for its branches
aggregating $2,400,00O, electlng its
auditors who would inspect the
credit society and hold one OF the
KEYS to its securities vaults.
Plan Not New One.
There is nothing novel in the plan
of furnishing cheap multiple insur-
ance to the members of the credit
society so as to enable the tenant
farmer to furnish as good security
for credit as the richest farmer, as
this has been tried in Europe tor
years.
The novelty of the plan consists
in the use of life insurance COM
pany to become credit insurance
company, as we'll as multiple in
surance company. This is analo-
pous to the British commercial
credit system in the use of the "ac-
ceptance house." which is nothing
more nor less than credit lnsur-
ance company.
Those acceptance houses are the
outrrowth of the old British inn
porting merchant firms, winch IN
the course of their importing bust
ness established their credit IN all
the important markets OF the world.
1t was contended by the experts
who appeared in the hearings on this
measure that the big life insurance
. company would prove an ideal "ac-
ceptance house" or credit insurance
company for the rural credit sys-
tenn. because its financial stability IS
established to high degree among
the wage earners of our industrial
and financial centers, as its base
rests on the uniform law OF mortal
ity and the fact such company in
Tr.- tn PAGE Two. Column Few)
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