Evening star., 1922-01-23
PRESIDENT GIVEN AN OVATION
AS HE URGES BROADER CREDIT
FOR EIIEVINC FARMERS PLIGHT
Text of Presidents Address
In Opening Farm Conference

the full dignity ana lnQependeMce
to which 1t Is entitled.
Even in our own times and un-
der the most modern and enlight-
ened establishments the soil has
continued to enjoy less liberal in
stitutions for its encouragement
and promotion than many other
forms of industry. Commerce and
manufacturing have been afforded
ample financial facilities for their
encouragement and expansion,
while agriculture on the whole has
Jagged behind. The merchant. the
manufacturer. the great instru-
have been provided methods by
which they enlist necessary capi-
tai more readily than does the
farmer. A great manufacturing
industry can consolidate under the
ownership of a single corporation
with a multitude Of stockholders,
a great number Of originally sep
arate establishments, and thus ef-
feet economies and concentrations
the markets where 1t must buy
and in the markets where 1t must
sell such as have not been made
available to agriculture. The
farmer is the most individualistic
and independent citizen among us.
He comes nearest to being self
sufficient. but precisely because of
this he has not claimed for him
self the right to employ those
means of cooperation. co-ordina-
tfon and consolidation which serve
so usefully in other industries. A
score or more of manufacturers
consolidate their interests under a
corporate organization and attain
great increase of their power in
the markets, whether they are buy
ing or selling. The farmer, from
the very mode of his life. has been
estopped from these effective COM
binations. Therefore. because he
buys and sells as an individual it
is his fate to buy in the dearest
and sell in the cheapest market.
Farmers Require Capital.
The great industrial corporation
sells it's bonds in order to get what
we may call its fixed or plant capt.
tai. just as the farmer sells a
mortgage on his land in order to
get at least a large part of his
fixed or plant capital. I am not
commencing the bonding or mort
gage system Of capitalization.
rather only recognizing a fact.
But there in large part the analogy
ends. Both the manufacturer and
the farmer still require provision
Of working capital. The manufac-
turer, whose turnover Is rapid,
finds that In the seasons when he
needs unusual amounts Of working
capital 4hescaN go to the bank an1i
borrow on short-time notes. Hie
turnover liz rapid. and the money
will come back in time to meet his
short-term obligation. The mer-
the same way. But the farmer is
in different case. His turnover
period is long one: his annual
production is small compared to
the amount of investment For
almost any crop the turnover PEE
riod Is at least year: for lives
stock 1t may require two or three
years for a single turnover. Yet
the farmer Is compelled, IL he bor-
rows his working capital. to bor-
row for short periods, to renew. his
paper several times before his
turnover is possible, and to take
the chance that If he Is called upon
untimely to pay of his notes he
may be compelled to sacrifice
growing crops or unfinished live
stock. Obviously, the farmer needs
to have provisions. adapted to his
requirements, for extension Of
credit to produce his working
capital.
Under the necessities Of war
time, consolidation and centrali-
cation Of credit resources and
financial capabilities went far to
sustain the struggle. Essential
industries were extended the help
and support Of society because So
,ciety recognized its dependence on
them. Much that was economi-
cally unsound and unfair was per-
petrated under cover Of this effort
to uphold necessary industrial fac
tors. But the lesson was useful.
and justifies inquiry as to whether.
properly adapted to peace condi-
tions, the methods Of larger inte-
grafton and wider cooperation
might not well be projected into
times Of peace. The need Of bet
ter financial facilities for the
farmer must be apparent on the
most casual consideration Of the
profound divergence between meth
DDS Of financing agriculture and
owns his farm is capitalist, ex-
ecutive and laborer all In one. AS
capitalist he earns the smaller re-
turn on his investment. AS ex-
ecutive, he is little paid, and as
laborer he is greatly underpaid in
comparison to labor in other occu-
pations.
Finances Misunderstood.
There is much misconception re-
garding the financial status Of ag-
riculture. II the mortgage indebt-
edness Of farms shows, over a
given period. a marked tendency to
increase, the fact become occasion
for concern. II during the Same
period the railroads or the great
Industries controlled by corpora
tisns find themselves able to in
crease their mortgage indebted.
ness by dint Of bond issues. the
fact is heralded as evidence Of
better business conditions and of
capitals increased willingness to
engage In these industries and
thus insure larger production and
better employment of labor. Both
the mechanism Of finance and the
preconceptions Of the community
are united In creating the impress
6AVu S0Sy 0SCcSS 10 amDi9
capital is Q disadvantage to the
farmer. and an evidence Of his
decay in prosperity, while pre-
cisely the same circumstances ara
construed in other industries as
evidence Of prosperity and Of de.
sirable business expansion.
In the matter Of what may be
called dxed investment capital
the disadvantage Of the farmer 30
strongly Impressed public opinion
that q few years ago the federal
farm loan board was established
to afford better supplies Of capital
for plant investment and to insure
moderate interest rates. But while
unquestionahly farm finance has.
benefited, the board has thus FAR
not extended its operations to the
provision Of working capital for
the farmer as distinguished from
permanent investment in the plant.
There should be developed q thor
'ough code Of law and business pro-
cedure. with the proper machinery