The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1922-10-27
new WORRY NOW
Big Banks Shutting OF Grain
Livestock Loans.
Source of Concern to Farmer
and Small Banker.
nan niIanTlAE nEonauNInI Z
CAR SHORTAGE RESPONSIBLE
Products Cannot Be Moved
From the Farms.
Attitude of Correspondent
Banks Comes as Surprise.

Kansas farmers and small town
bankers today face new source OF
worry and trouble. Unless it is pos
sible to promptly market their farm
products many of the big correspond
ent banks will refuse to loan addi-
tional money on grain and livestock
At least one large correspondent
bank in Kansas City has notified a
Kansas banker that no additional
funds are to be loaned.
Much of the trouble which recently
has confronted small banks has been
due to inability to secure additional
money from the large city banks.
Some of the small banks were loaded
down with redisfounts to the point
where their solvency might have besn
seriously involved even in normal
times. But with their local borrowers
unable to market crops conditions be-
came desperate. Now a new compli-
cation has been presented in refusal
of some of the city banks to extend
grain collateral.
In normal times there is a big
demand for the better class of Kansas
farm paper. Notes secured by crops
in bins and elevators have usually had
a ready market. Local banks with
careful, conservative loans had no
trouble borrowing plenty of money
from their city correspondents when
local conditions demanded a bit of
nursing. Now it looks as tho the lid
is about to be clamped down by some
of the large correspondent banks. This
situation in turn threatens smaller cor
respondent banks and naturally cuts
off the borrowing ability of the farmer
and stock grower.
Strange Language in Kansas.
A few days ago one Kansas City
bank sent this letter to a banker in
one of the richest farming commune
ties in Kansas:
1--WE are returning herewith the paper
forward ed in your favor of the 10th, as
the security described in the mortgages
does not pass our approval. We do not
care to make any leans s; based upon
are not worth very much when you go
to realize upon them. Neither do we
care to accept growing grain or wheat
in the bin or corn in the crib or cattle.
You will note that all of these mort
cages include chattels that meet our
objections"
That is a strange language in Kan
sas. Whether the policy of the par
ticular correspondent bank will be
adopted generally by the city fnstitu-
tons is not known. If SO it is certain
to reflect on general lines of business
ana INDUSTRY, according TO wise Ddnk-
ers. Shutting off of loans on farm
paper would naturally have reaction
on all lines of business in Kansas
which relies mainly upon agriculture
and stock raising for it's prosperity.
Car Shortage To Blame.
The car shortage of the last few
months has been largely responsible
for the present situation. Wheat, corn,
oats, broom corn, kafirs, hay and
other crops cannot be moved because
of the scarcity of rolling stock. Nor
are the cattle and hog growers able
to reach the market centers with
their herds and droves.
Several days ago a statement was is
sued by the state banking department
to the effect that the car shortage
would not affect banks in good con-
dition. On the heels of this statement,
tho, comes the letter from one of the
large Kansas City correspondent
banks which fatty shuts off placing
of rediscount paper by the small town
institutions. So far as positively
known only one Kansas City bank has
sent out the letter relating to farm
securities which is backet by a flat re-
fusal to accept this class of paper.