The Washington herald., 1922-12-12


would be controlled BY the farmers
and others BY whom the capital
would b subscribed. Notes for
productive purposes would be re-
quired 70 have the indorsemsnt
Of the local organisation. which
would have the right 70 indorse
ton for sale an amount Of notes
capital. The procedure under this
plan would be somewhat a. fol-
lows:
The farmer goes to the local
credit organisation. II Il decides
TO lend him money. Il takes his
note. indorsss Il, and passes II on
to the regional institution. which,
IN turn. places the local body's
note in its treasury and issues its
own obligations against Il for sale
In the credit markets OF the
world.
The regional institutions would
Be controlled by a central organi-
ration under Federal authority.
Each should be allowed to issue
and sch It's obligations in the open
market to the extent Of ten times
It's capital.
ALLEGATION OF FUNDS.
There 10 no reason why one CEN
trial organisation should not be
the agency for all Of the three
above purposes. However, this
institution should be rigidly de-
partmentalized and q certain per-
oentage Of its funds aliocated to
each branch Of the organization.
Its obligations for the three diff
ferent purposes enumerated would
thus stand on their own bottoms.
separate each from the other.
Otherwise credit for marketing
crops and for live stock would
have to pay as high a rate of in
terest as that which was granted
for productive purposes which has
no marketable collateral.
After all u said and done. Of
course. the final arbiters of how
much money will be raised will
be the investing public. banks
and bankers.
The initial capital of the new
system could be obtained out Of
the liquidation Of the War Finance
Corporation.
II must be remembered, how
ever, that no legislation can Gre
ate higher prices. which are de-
termined solely by the law Of
supply and demand; neither can
leg1slation give a farmer more
credit than his character and
volume of production entitie him
to.
BILL NOW IN CONGREss
The country should be divided
into regions for the establishment
Of the regional loan institutions
somewhat on the basis of the
Federal land banks and the Fed
erai Reserve system.
Since preparing this address
there has been introduced into
Congress q bill covering most Of
the things herein suggested, with
a most valuable addition of ad-
mission of small banks nto the
Federal system.
AZ in the case Of the land
banks, provision should be made
for the repayment of the original
capital investment OF the Govern
ment. In the end the Govern
ment would be repaid not only
in the money sense. but also in
the greatly increased prosperity
OF 40 per cent Of the popula-
ton! yes, of the whole population.
But We must remember that
whatever instrumentality we have,
no matter how excellent its or
gantzation and objects, IL Is, after
all. the intelligent direction Of its
affairs that will realize the de-
sired results. Let us not be too
critical of our Federal Reserve
system as such. for in fairness
we must admit that II has accom-
plished much; nor should we ex-
pect too much Of any new insti-
tuition.
ONE THING AT A TIME.
have not been called upon
to speak Of the additional things
that are necessary. but may
say that one of them has to do
with greater cooperation in mar
keting. This, 1 am glad to say.
is increasing by leaps and
bounds. Let US always remem-
ber that We can not enjoy the
fruits Of cooperation unless each
one gives us a certain amount Of
his individuality and allows a
specialized organization. the CO.
operative society, to do his mar
keting for him. Each one may
think he can do 1t better; but
IL all thought SO we would remain
with the old-fashfoned machinery,
which has given poor results.
Another matter of Importance
which IN n mart 0f alroosf .varv
program for the removal Of un-
necessary burdens upon agricul-
ture. In that Of carrying of narm
products from the Government to
the consumer.
But ! would urge upon you the
necessity Of concentrating on the
doing of one thing at a time.
believe the matter of credit Is
basic.