, 1922-07-27
CREDIT VALUE
OF CONFIDENCE
How the Farmers, Defeated Merd-
Iessk BY the Democrats, were
Saved From Ruin

1t is a we'll known fact in the
business world that the man who Is
urgently in need OF credit usually
can't get II. while the man who can
get II usually does lot need 1t. In
the latter part of 1920 and the early
part of 1921. the American farmer
was In the position OF urgently need
Ing credit, but he couldn't get 1t.
h circumstance is called to
mind by the recent address delivered
by Eugene Meyer, Jr-. manager Of
The War Finance Corporation, an
Institution that was designed par
ttcnlarly to help market farm crops.
Picking out a few sentences that
II directly upon the agricultural
situation in the years mentioned, we
quote Mr.. Meyer: "In 1920, Just as
tho farmer was beginning to harvest
his crops the price Of farm products,
and with it the purchasing power of
the farmer. declined abruptly. E.
h collapse OF 1920 was due. in no
small measure. to the pressure upon
the agricultural producer and the
stockman to liquidate loans in a
shorter time than was necessary to
market his output in an orderly
manner. The prices received by the
farmer for his products under forced
liquidation and hasty selling i'm
paired his buying power. =. Early in
1921. the Congress decided. in the
face OF opposition on the part Of the
late administration. that something
ought to be done. and revived the
Wal Finance Corporation as a piece
Of emergency machinery"
Those facts are a matter Of rec
ord. The Wal Finance Corporation
rnf htIcH thD ~
began providing credits and giving
assurances Of more. Agriculture be-
gan to revive out of all proportion to
h amount of loans actually made
the revival being due in large part
to the knowledge that the farmers
could get credit.
This reminds one of an Incident
during tie panic OF 1898. when there
was a great run on banks. In a
small town where there were two
banks. there was a run on the
smaller institution and a crowd Of
depositors damned the entrance try
ing to get their money. While the
rush was at its height. the president
Of the rival bank appeared behind
tho crowd and beckoned to the head
of the bank that was being raided.
The latter got as close to the door as
4e CDulu anu the banker on tno OUT
side shouted. "How are things going,
John? II you need any money. let
me know and I'll send it over" With
that Information depositors were
satisfied and dispersed. I
That was practically what hap
pened to the farmers. Uncle Sam,
seeing the pressure that was brought
to bear upon the agricultural pro-
ducers, called out. "How are things
going. Mr.. Farmer? If you need any
more money. let me know and I'll
send It over And when the credit
ors of the farmers saw hat the
money would be forthcoming. they
let up on the pressure. Uncle Sam
did furnish considerable loans. on
good security. but the benefits were
far In excess Of the actual advances
in cash. The Democratic administra-
ton had brought pressure to bear
upon the farmers. and the Republic
can administration relieved the
pressure. Mr.. Meyer. oes not state
the facts so directly as that, but the
record shows that to be, in the main.
the true story of the agricultural
depression and revival"