Free trader-journal and Ottawa fair dealer. (Ottawa, Ill.) 1920-1927, 1922-01-21
URGE SHORT LOANS
AS EFFECTIVE WAY
TO END FARM CRISIS
CONGRESSIONAL COMMITTEE
LAYS STRESS ON NEED OF ELL.
LING GAP BETWEEN SHORT
AND LONG TERM LOANS.

Washington, Jan. 2l,--Criticism Of
the Federal Reserve Boards policy
during the months following the az
mistice is coupled with recommends
tons that existing banking agencies
be adapted to meet the credit re
quirements OF farmers in report
Admitted to congress Friday by the
joint commission of agricultural in.
quiry.
The report, the second of a series
from the commission of which Repre-
sentative Anderson, republican, Min.
nesOta, is chairman. deals with bank
ing and financial resources of the
country, especially as affecting agri.
cultural interests.
1t stresses the importance of filing
the gap between short and long time
credit, and concludes thar the pres.
ent gap can can be effectively and
safely bridged without the necessity
of establishing any new or untried
machinery and without sacrificing
any Of the fundamental principles up.
on which both the farm loan system
and the federal reserve system must
rest
Reviewing conditions that have
confronted farmers since the war
the report says:
Il is the opinion OF the commission
that a policy OF restriction OF leans
and discounts by advances in the
discount rates OF the federal reserve
banks could and SE0Gld have been
adopted in the early part OF 1919.
notwithstanding the difficulty which
the treasury department anticipated
in floating the victory loan If such
a policy were adopted
II is also the opinion Of the COM
mission that had this policy been
adopted in the early part OF 1919.
much 0 fthe expansion, speculation
and extravagances which character
lied the post war period could have
been avoided and hardships and loss
es which occurred in 1920-2l as re-
suit Of the process Of defatiOn and
liquidation would have been diminish
ed.
The report summarizes the CON-
missions recommendations as TO bet
ter credit facilities for agricultural in
terests thus
The commission believes that the
credit problem of the farmer can best
be met by adapting existing banking
agencies to his credit requirements
These requirements are for credit Of
sufficient maturity to make payment
possible out of the proceeds Of the
farm
This means a credit running from
six months to three years, depending
upon the character of the commodi-
ties to be produced and marketed. In
the case of crops six months may be
in some instances sufficient, but IN
the case of live stock three years
may be required.
The commission proposes to meet
these requirements by authorizing
any federal land bank through a sep
arate department created in II under
restrictions, limitations, conditions
and regulations adopted by the farm
loan board, to rediscount paper on
which money has been advanced to or
used by the farmer for agricultural
purposes, having a maturity Of not
less than six months or more than
three years, at rates of discount to
be fixed by the farm loan board for
any national bank, state bank, trust
company, savings institution, or live
stock loan company.
In addition the commission deems
it desirable to permit the federal
land banks to make loans direct to
cooperative associations Of farmers
organized under state laws for the
purpose of marketing staple agricul-
tural products when such loans are
secured by warehouse receipts upon
such products.
The notes or obligations represent
ing loans or discounts by the federal
land banks are to be converted into
short time debentures and sold TO
the public in the same way as farm
loan bonds are now sold.
1t is proposed further that notes
taken or rediscounted by a federal
land bank shall be eligible for redis-
count with any federal reserve bank
when such loans have reached a ma
turity of less than six months