Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-01-21
CREDIT BRIDGE
FOR FARMER>|S
RELIEF URGED
Joint Agricultural In
uuirv Favors Medium
Term Loans Plan.
Reserve Board Raped
for Not Instituting
Deflation Earlier.

Washington, Jan. 2O.-Criticism of
the federal reserve boards policy dur
ing the months following the armistice
is coupled with recommendations that
existing banking agencies be adapted
to meet credit requirements Of farm
ers, in report submitted to congress
by the joint commission OF agricultural
inquiry.
The report, the second of a series
from the commission, deals with the
banking and financial resources of the
country, especially as affecting agricul-
tural interests. 1t stresses the import
ance of filling the gap between short
and long time credit and concludes that
the present" gap can be effectively
and safely bridged" without establish
ing any new or untried machinery and
without sacrificing any OF the funda-
mental principles on which both the
farm loan system and the federal re-
serve system must rest"
Restriction Needed In Spring of 'i9
Reviewing conditions that have con
fronted farmers since the war, the re-
port declares:
1T is the opinion of the commission
that a policy of restriction OF loans
and discounts by advances in the dis
count rates Of the. federal reserve
banks could and should have been
adopted early in 1919, Notwithstanding
the difficulty which the treasury de-
partment anticipated in floating the
victory loan if such policy were
1T is also the opinion of the com
mission that had this policy been adopt
ed. much of the expansion, specula-
tion and extravaganza which charac-
terized the postwar period could have
been avoided.
'"The commission also declares that
had such policy been adopted, the
difficulties. hardships and losses which
occurred in 192O-21 as result Of de-
flation and liquidation would have been
diminished
Half to 3.Year Loans Urged
The report summarized the com
missions recommendations as better
credit facilities for agricultural inter-
ests thus:
1.-The commission believes that the
be met by adapting existing banking
agencies to his considerable require
ments. In meeting these requirements
there is no reason why all banking
agencies cannot be used by adapting
them to. the farmers requirements.
These requirements. are for credit of
sufficient maturity to make payment
possible but of the proceeds of the
farm. This means credit running
from six months to three years.
"The commission proposes to meet
these requirements by authorizing any
federal land bank, through a separate
department created in it, under restric-
tions, limitations, conditions and regu-
lations adopted by the farm loan board
to rediscount paper on which money
has been advanced to. or used by the
farmer for agricultural purposes, hav-
ing a maturity of not less than six
months nor more than three years, at
rates of discount to be fixed by the
farm loan board for any national bank.
state bank, trust company, savings in
stitution. or livestock loan company.
In addition, the commission deems it
desirable to permit the federal land
banks to make loans direct to cooper
ative associations of farmers organ
lied under state laws for the purpose
Of marketing staple agricultural prod
ucts when such loans are secured by
warehouse receipts on such products
Converted Loans Would Be Sold
1.-The notes or obligations represent
ing loans or discounts by the federal
land banks are to be converted into
short-time debentures and sold to the
public as farm loan bonds are sold.
1T is proposed that notes be taken
or rediscounted by a federal land bank
when such loans have reached a ma
turity of less than six months In ad-
dition, any federal reserve bank is
authorized to buy and sell the deben-
lures issued by the farm loan board
as they now buy and sell farm loan
bonds"