Abilene weekly reflector., 1922-11-02

THE FARMER'S CREDIT

| IL. u. waters IN hAnSaS Clty Star
The farmer probably will always be
n heavy borrower. When he bor-
rows he ought to be able to get
money at reasonable rate and
under conditions that do not inter-
fere with the proper conduct Of his
business.
The objection to the conditions
under which the farmer now bOrrows
IL that the interest rate Is high and
the conditions are oppressive. The
note the farmer makes at the local
bank for funds With which to make
current expenses usually falls due
before the farmer has produced
anything with which to meet the
note. Renewal in mid season means
! paying compound interest and in
| tr0duces an element Of uncertainty.
IL the note is dated far enough ahead
to make renewal unnecessary before
the farmer harvcsts his crop the note
Is not acceptable for rediscount at
the Federal Reserve Bank because
of the length Of time it runs.
All this means that our banking
system Is adapted to financing mer-
chants and manufacturers with their
quick turnover and not to financing
the farmer with his slow turnover
TO illustrate: Only about three
months are required to convert a
fleece of wool into a garment, but
fully twelve months must elapse be-
4 "a ~ nf Cd
ty days will suffice TO change wheat
into bread, but from one wheat har-
vest to another is n full round year;
three months is sufficient for the
packer to slaughter and sell steer
which 1t has taken the farmer three
years to produce.
There Is no inherent reason, how
ever. why all current loans should
fall due within sixty or ninety days.
a six or nine months note, secured
by wheat in the elevator or steers
on grass or in the feed lot Is safer
curity because in the one case the
farmer may dispose of his product +,
to good advantage and in the other
he may not. Obviously, Il loan that
the borrower Is an un-
safe loan. and one which enables
the borrower to prosper has behind
It the safest possible security.
A situation in which the money
lender Is In position to tell the farm
n when he must sell his wheat, cot
tOn. corn or cattle because he will
not consent to the renewal of the
farmers note is dangerous in the eX-
freme. There Is no one in all the
world who has the right to deter :
mine this question except the farm
,r. the man who has worked in sun :
shine and storm to produce these
products.
Therefore. n system of credit that
influences, by the high rate Of inter-
'st charged by the short period of
he loan or by the need of the lend
'r for his money, the time when the
farmer will market his products en-
'Ourages dumping Of farm products.
helps to break the market and to
bankrupt agriculture.
The farmer is right, therefore, In
Ms demand that his notes. reason
.bly secured be accepted or redis-
'ount at the Federal Reserve Bank
III the same terms and as freely as
he notes OF the merchant or packer.
ON the whole. the farmer pays a
higher rate of interest
IN his borrowings than most other
business men. This, however, is
argeiy due to the fact that stbe
average farmer has not taken pains :
% put his credit in as good
shape as have other borrowers.
When the farmer uses the same bus
ness methods as other borrowers do
ne finds that he secures the same
rate that others pay This is strik-
ngly illustrated by the fact that the
Oklahoma and Texas Wheat Grow
FRS Association. through which
some wheat growers have pooled
heir grain and credit, are able to
borrow several million dollars on
warehouse receipts at per cent.
when farmers not in the pool are :
aging s or 10 per cent for their :
There is no substitute for sound
BUSINESS methods. The farmers wiz :
ret the same accommodations that
'ther men get when they follow the :
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