Wauwatosa news. [volume] (Wauwatosa, Wis.) 1900-1948, 1922-07-21
HERE IS 4 BILL
To HELP FARMERS
DEALS WITH ORDERLY MARKET
ING AND FINANCING OF THE
LIVE STOCK INDUSTRY.
PROVIDES LONGER CREDITS
Measure Which Has Been introduced
in Congress Has the Backing Of the
Federal Reserve Board and the
Finance Corporation.
By JAMES ?. HoRNAoAY

~
Washington.-A bill which has the
backing of the federal reserve board
and the finance corporation has been
introduced in congress dealing with
the orderly marketing of agricultural
products and the financing of the live
stock industry. To promote orderly
marketing, the bin provides that notes
drawn for an agricultural purpose, or
based on live stock. shall be eligible
for rediscount with the federal reserve
banks with maturity of not exceed
Ing six months. This is in accordance
with the present law. The bin pro
yides further, however, that where ag-
rlcultural paper is secured by ware
house&eceipts covering readily market
able and non-perishable agricultural
products, 1t may be eligible for redis.
count for maturity not exceeding
nine months.
Loans on feeder stock, as distin.
guished from loans on breeding herds.
are also eligible f6r rediscount with
a maturity not exceeding nine months.
Under the bill the federal reserve
board may limit the amount of PAGER
OF six and nine months maturities
which any federal reserve bank may
discount, and may prescribe regula-
tons designed to insure that nine
months warehouse receipt paper dis
counted by member banks is issued as
part Of a program of orderly market
ing, and not for speculative holding.
The bill also seeks to clarity the
eligibility Of notes of cooperative mar
keting association.
In order to encourage state banks to
take advantage of the federal reserve
system, the bill reduces the minimum
capital necessary to render state
bank eligible for membership, but with
the provision that within three years
the capital will be increased to the
present statutory limit. The idea un.
DERIVING this part of the bin is that
new agencies should not be created
where existing machinery can safely
carry the load. and that the rediscount
facilities of the federal reserve sys-
TEN should be used where possible.
To Finance Live Stock Industry.
The financing Of the live stock in
dustry, involving as 1t does a turnover
only once In two or three years in the
case of breeder herds, should not, ac-
cording TO the finance corporation, be
5lndled through the federal reserve
system, and new machinery must be
set up. In order to put live stock
financing on a sound, permanent basis.
il is proposed. under title 2 of the bill.
that q system of regional redlscount
corporations be established to be
known as federal live stock Gnance
corporations along lines somewhat sim
liar TO the joint stock land banks,
Any live stock company with p,lid-
up capital Of 100000, or more, is
eligible for membership in the system.
and is entitled to rediscount privileges,
being required to subscribe an amount
equal to %, per cent of IFS paid-in cap
ital to the capital of its federal live
stock finance corporation.
ANY member live stock company is
entitled to rediscount paper in an
amount not exceeding five times its
paid-in capital stock, secured by chat
tel mortgages on live stock having a
market value at least 80 per cent In
excess of the face amount of the note.
lie live stock must be inspected in
accordance with regulations drawn up
by the federal farm loan board. and
the paper may have a maturity OF not
more than one year. with provision for
renewal up to three years from Its
original date.
other Provisions OF the Bill.
The bill makes other provisions
safeguarding the capital of the mem
Der loan companies, authorizing the
federal farm loan board to appoint
three of the seven directors of each
federal live stock corporation; regulat-
ing the rediscount rate. and the rate
which may be charged by live stock
loan companies, limiting dividends
which may be paid by federal live
stock finance corporations, and pro-
viding for the issuance of bonds, with
maturity of not more than three
years, which shall be tax exempt only
ii issued before June 80, 1925.
The proposed bill does moi attempt
60 set up new machinery for general
agricultural credits. but /; provides
that this financing may be done by an
expansion of the existing banking sys.
tenn rather than by new machinery
based upon the sale of bonds on the
investment market. 1t is believed
by its supporters, however. that the
financing of i've stock, especially so
far as breeding herds are concerned
requires special machinery of its own.
as the three-year turnover of a cattle.
man should not be financed out of
banking funds representing demand
deposits The bin attempts TO pro
vide a means by which the best quail.
ity OF live stock paper, complying with
definite standards upon which invest
ols can rely. can be used as a means
of raising substantial amount or
funds at reasonable rates.