The Topeka state journal., 1922-12-09
TOPEKA STATE JOURNAL
Information Bureau
FTNANCING THE FARNGER.
FREDERIC ,. HAsKIN. Dtre0ss
waShington. ID. O

washington, ID. C., Dec. D. - Tne
forthcoming session Of congress will
bring consideration and probably en-
actment of important financial leg1s-
lation designed principally to benefit
the American farmer. The elections
strengthened the hand of the agricnl-
tural bloc which, as group, repre-
sents with especial care the interests
OF the tiller of the soil in the halls OF
congress.
When, two years ago, the prices of
farm products declined with an un-
precedented sharpness and the farmer
received less for his product than it
cost him to produce it, the farming
community was convinced that the
underlying reason for this calamity
was an inadequate credit system
Many special inquiries were made
into the problem, the most compre-
hensive being that made by the joint
commission OF agriculture inquiry OF
which Representative Sydney Ander-
son, of Minnesota, was chairman and
which comprised members of both
senate and house. taken largely from
the agricultural bloc. This investiga-
ton revealed that the farmer lacks
the precise sort of credit facility which
he needs.
1t was found that there are at pres
ent two kinds of credit open to the
farmer. First. the federal reserve
system provides an open door where
by the farmer may obtain credit for
six months. provided his local bank
will endorse his notes. This Is the
longest term paper which the Federal
Reserve banks admit, the farmers be-
ing favored over manufacturers. mer-
chandisers and other business men
who are held down to 90-day credit.
However, six months is not long
enough for the farmers.
The second kind of credit is that
provided by the federal land banks
thru the federal farm loan system
This is credit based>on land mortgages.
To obtain this financial aid the farmer
mortgages his farm and he may have
terest and principal. The farmers
make good use of this facility and
many hundreds Of millions are lent to
them. However. this does not fill all
the needs Of the agriculturist-
Farmer Gets Paid Annually.
The farmer plants his crops, as
general rule, in the spring OF the year.
He must buy seed and fertilizer and
hire men to -plow the land. Then,
thruout the long sumner. ne must
bear the expense of cultiVat1ng ana,
finally. of harvesting. The worker in
other lines gets his pay envelop on
Saturday night or, at the longest.
ut the end of the month, but the farm
er's pay envelope comes only once
year
What the farmer wants is a middle
facility, with government
backing and supervision, somewhere
between the short term facility of the
federal reserve banks and the thirty
year farm mortgage loan. Specifically
ne wants nine months to one year
Credit. This will enable him to make
loan and with the proceeds finance his
entire season. AT the years end when
mis- crop is harvested and sold, he will
have a comfortable period in which
to pay off.
In addition to what the general
: rmer wants, there must be stiE
different type of credit for the live
stock raiser. He wants three-year
credit He must have funds to carry
he expense of breeding calves and
bringing them to market
The agricultural bloc Will go into
his winters session with a legislative
program to bring about some of this
assistance for the farmers and in all
some new law will be writ
en- on the statute books on THIS sub |
ect, for the administration has an |
bounced that it is in sympathy with |
he plan.
There are four pending bills de- .
igned to bring about the medium
ength farm credits. They are the |
bill, the McFadden. |
,apper bill, the Simmons bill and the |
lorbeck bill All have points of |
imilarity and the final act doubtless
will be made up by. taking the best |
eatures of each. They will provide |
redits for farmers ranging from nine |
months to three years.
Under the existing farm loan act, |
which is the thirty-year farm mortgage /
AGILITY, the maximum loan is $40, 900. |
t is planned to amend this to permit |
farmer to obtain $4,000. 1t is
loped to get such a bill thru by March /
B., next. That date, each year, is one |
N which many farm mortgages ma
ure in all parts of the country and it
8 hoped to have the new authoriza~
ion ready in time to permit farmers
Q convert their old mortgages into
lew with the higher maximum loan.
Under existing law, to obtain these
oans, national farm loan associations
must be formed and no loans can be
made except thru them. 1t is felt that +
where no such associations have been
the farmer is not ade-
uately taken care of. Therefore, a
aw will be proposed providing for the
of farm loan agencies
which will deal directly with morgan
zed farmers and obtain loans for
hem on the security of their, farms.
Farm Loan Bonds GiIt-Edged.
The millions which are lent to the
armers are obtained from the sale of
ponds known as farm loan bonds,
which have a status as quasi-govern-
nent bonds and are gilt-edged securi-
les with a ready market. The federal
and banks have, in the past, market
d these thru banking syndicates, pay-
ng commissions for the service oer-
ormed. 1t is planned to save this ex-
)ense by the creation of a bond SELL
ng organization among the fed arz4l
and banks. BY selling their own
'onds they expect to be able to raise
money at less expense, this being later
effected in a smaller interest charge
o the borrowing farmers.
A complaint against the federal re-
erve system has been that member
'anks are chiefly located in cities. Tire
mall country, banks are not large
nough to join. Therefore, even siich
redst facilities as are provided by the
ystem are not available to farmers
Ieep in the country because their
mall, local banks are not members.
20 remedy this. it is proposed to ad-
nit banks with capital as low as $12,-
90 to membership. This membership
would give them the privilege of re-