Greene County herald. (Leakesville, Miss.) 1898-current, 1922-07-21
DEALS. WITH oRpeRtY MARKET
ING AND FINANCING OF THE
LIVE STOCK INDUSTRY.
PROVIDES LONGER CREDITS
Measure Which Has Beer 9Ihspddced
in Congress Has the Backing Of the
Federal Reserve Board and the
Finance Corporation.
BY JAMES P. HoRNApAY

DoShhis VI Tue leuefdl reserve board
and the finance acorporhtion has been
introduced in congress dealing with
the orderly marketing of agricultural
products and the fnallfcing on the live
stock industry. To promote orderly
marketing, the bill provides that notes
drawn for agricultural purpose, or
based on live stock, shall be eligible
for rediscount with the federal reserve
banks with a maturity of not exceed
Ing six months This is in accordance
with the present law. The bill pro
Sides further, however, that where ag-
ricultural paper Is secured by ware
house receipts covering readily market
able and non-perishabie agricultural
products, 1t may be eligible for redis-
count for maturity not exceeding
nine months. -t-.------------..---
Loans on feeder stock, as distin.
guished from loans on breeding herds.
are also eligible for rediscount with
a maturity mt exceeding nine months,
Under fhe bilf the federal reserve
board may limit the amount of paper
of six and nine months maturities
which any federal, reserve hank may
discount, and may prescribe regula-
fions 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 advantages 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 win be Increased to the
present statutory limit The idea I'M
DERIVING this part of the bill 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-
fem should be used where possible.
I To Finance Live Stock Industry.
The financing Of the live stock in.
dustry, involving as it does turnover
only once in two or three years in the
case of breeder herds. should not, ac-
cording to the finance corporation. be
handled 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 of the bill,
that a system of regional rediscbunt
corporations be established TO be
known as federal live stock finance
corporations along lines somewhat sim
iiar to the joint stock land banks
Any live stock company with a paid
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 its paid-in cap
ital to the capital of its federal live
stock finance corporation.
Any member live stock company Is
entitled too rediscount paper in an
amount not exceeding five times its
paid-in capital stock, secured by chat
fel mortgages on live stock having a
market value at least so per cent in
excess of the face amount of the note.
The live stock must be inspected in
accordance with regulations drawn up
by the federal farm loan board. and
the paper may have 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 men,
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-
yiding for the issuance of bonds, with
d maturity of not more than three
years, which shall be tax exempt only
( ii issued before June 30, 1925.
The proposed bill does not attempt
10 set up new machinery for general
agricultural credits, but it provides
that this financing may be done by an
expansion of the existing banking sys.
ten rather than by new machinery
based upon the sale of bonds on the
Isjuvestment market. 1t is believed
by its supporters, however. that the
financing of live stock, especially so
far as breeding herds are concerned
requires special machinery Of its own,
las the three-year turnover of cattle
man should not be financed out of
banking funds representing gdemahd
deposits The bill attempts to PRO
vide a means by which tie best quail
ity of live stock paper, complying with
. definite standards upon which invest
kors can rely. can be usedegs a means
&~f roiufnv a substantial amaunf nj