The Bingham County news. [volume] (Blackfoot, Idaho) 1918-1930, 1922-07-07
THE WORK OF THE WAR
FINANCE CORPORATION

Address of Dwight F. Davis, Director
War finance Corporation, At the
Convention of the Illinois Bankers
Association, St. Louis, Missouri,
June 20 and %, 1922.
It is a great pleasure to have the
opportunity of speaking to the Ill
inois Bankers Convention about the
work of the War Finance Corporation
am especially glad to do SO because
1 find there are many people who do
not understand the functions Of the
Corporation in carrying out the Agri-
cultural Credits Act passed by Con-
Rress last Autumn. When the Act was
passed, many believed it to be a char
ity measure to use public funds for
the benifit of one class in the COM
munity. For example few days
later we received letter reading
somewhat as follows: Il see by the
papers that Congress has passed a
law appropriating a billion dollars
for the farmers. ! am farmer and
need some money. Please send $4,000
TO above address. P. s.: Can you
make it 100000" others, and among
them some bankers, felt that the Act
was a radical innovation, menacing
our whole banking system. and per-
manently putting the Government into
the banking business.
AS a matter OF fact, the Act was a
temporary emergency measure to
meet a crisis threatening a vital in
dustry with disaster, which would ser
iously affect every other industry in
the country. It did not put the Gov
eminent into the banking business,
but paved the way for the develop
ment Of our system along lines which
experience has shown to be necessary.
Our present banking system, since the
adoption Of the Federal Reserve Sys-
tenn is adequate to care for the needs
Of the manufacturing, commercial, and
Industrial interests Of the country.
Adapted from foreign systems, with
out making all the changes and ad :
justments necessary to fit it to meet
our differing conditions, the recent
crisis showed that it was not adequate
to the needs of our agriculture. The
Agricultural Credits Act simply auth
orized the War Finance Corporation
to fill this need temporarily until the
necessary permanent financial mach
inery could be set up and as soon as
that is done, the Corporation should
and will, cease it's activities. Far
from being a radical departure from
our established banking system, 1t is
a stopgap set-up in an emergency IN
til the present system can be adjusted
to put the basic industry of agriculture
on sound financial basis adequate
to it's needs, and similar to that alread,
established for other industries. II
fact the assistance given by the Wa
Finance Corporation has temperate!
forestalled the agitation Of unsount
financial paneceas and has given Con
gress time to study the needs of agri
culture and to adjust our financia
machinery to fulfill these needs OF
sound business lines.
At the time the Agricultural Credits
Act was passed by Congress, our ag
ricultural industry, one of the mos
important factors in our nationa
welfare, was threatened with disaster
In the postwar slump, prices of tn
agricultural products which the farm
ers had for sale had declined NOR
rapidly than the prices of other pro
ducts which he had to buy. In tn
case of most products, the ,pric
he was able to obtain was less thai
the cost of production. Due to world
wide financial distress, the farme
was compelled to dump his product
on the market, so that he might settl
his debts, and this forced liquidation
further disorganized an already dc
pressed market Further credit wa
not available - fear and panic pre-
vailed in many cases, = the saving
of lifetime were lost, and condition
of distress existed among the farmer
and stockmen, such as had never be
fore been equaled in history of tn
country.
In view of this crisis, more tina
any of us realize even today, 1t wa
necessary for the War Finance Cor
poration to function Immediately
Congress had thrown upon it the re
sonsibility of meeting this emergenc
the President and the whole admin
istration were keenly and sympathet
ically interested that these condition