The New York herald., 1922-12-14
No Politics With Rural Credits.

mo FOutiCS win Rural NfeOltS.
Congress factions and Congress
blocs would better have a care how
they play politics with the Admin
istration measure to provide bank
credits for the American farmer.
Whether Democratic members make
a football of this measure to put the
Republican party in hole, as the
plain talk is in Washington, or
whether radicals in the Republican
ranks tamper with it to embarrass
the President, they will be in a bad
business for themselves. The country
wants this rural credits legislation
to go through as much as agriculture
wants it to go through, and the gen
eral public as well as the farmer is
going to give sharp attention to any
Congress element that bedevls this
important national matter.
There is nothing abnormal about
the credit needs of the farmer and
there is nothing mysterious about
the means to supply them. Those
who have had practical experience in
providing rural credits in great bulk,
like EUGENE MEYER, Jr., head of the
War Finance Corporation, and those
who have studied the question thor
oughly as an economic and financial
theorem, like BERNARD BARUcH, are
generally in agreement with the mass
of intelligent, responsible farmers as
to what is required and what can be
done soundly and safely.
The farmer must have adequate
bank credits or other loan facilities
to take care of three different phases
of his business and he should have
them at a reasonable cost. The first
OF these is borrowing power on the
farm itself AS the land, buildings
and equipment are perfect security
for such loan on proper valuation
there is nothing involved here, from
good banking or wise investing.
From the point of view of the
farmer and of the country which de-
pends on the farmer for its food and
clothing the debatable question at
this point is what should be the limit
in the size of such farm loans. But
obviously a farm worth $4,000 can
not be adequately financed on the
same amount as a farm wortS
$4,000. Obviously, also, farm
worth $4,000 is as strong collateral
for a loan of $4,000 or $4,000 as a
farm worth $4,000 is for loan of
S2,50O or $500.
And any American mind of vision
and imagination can see that low
limit on farm loans, Irrespective of
the capacity of the farm to produce
and of the capacity. of its owner to
make it produce, means nothing bet
ter than an enforced system of petty
farming in this country of grand
scale performances.
Another need of the farmer is a
bank loan on his crop when it is a
tangible. concrete fact ready or al
most ready for market but which he
does not want to sell yet because OF
market conditions. Here again there
is perfect collateral in the crop itself,
on proper marginal valuation, and
there is nothing in that for an agri-
cultural banking system to be
afraid Of.
The third natural requirement of
the farmer involves what is known in
business as a moral risk. In this case
he has no crop to put up as collat-
eral; perhaps he is a tenant farmer
and owns no land. He wants to raise
crop and the country wants him to
raise a crop. lie needs money for
seed. for implements. for labor. He
needs money for himself and his
family to live on during the year it
will take him to raise, harvest and
market his crop. And he must
get 1t.
This is no new thing in the gen.
eral business field, where the greatest
and most successful bankers habit
ually make loans to men-character
loans-on their standing in the COM
munity. This. however, is the real
crux of the agricultural credit prob
lem. There are risks of unseason-
able floods, drCnghts and frosts, Of
olights and of other devastations that
may make and do make every year
utter failures out of thousands Of
crops that competent farmers have
undertaken to raise. Moreover, there
are thousands Of new farmers start
ing out every season with no record
Of achievement in the communities
Ir which they settle.
Nevertheless the country wants