South Bend news-times. (South Bend, Ind.) 1913-1938, 1922-07-15
new AGRICULTURAL
FINAN cling BILL
Agricultural Paper May Be
Secured by Warehouse Re-
ceipts on Products.
by LOUIS LUDLOW.
News-TImes stan Correspondent.


WASHINGTON. -. G, June IL
A bill which has the Decking Of the
federal reserve board and the war
finance corporation has been intro
duced in congress dealing with the
marketing of agricultural products
and the financing of the livestock in
dustry. To promote orderly market
ing the bill provides that notes
drawn for an agricultural purpose
or based on livestock. shall be eligI-
BILE for rediscount with the federal
reserve banks with a maturity OF
not exceeding six months. This Is
in accordance with the present law.
The bill provides further. however.
that where agricultural paper is Sc
cured by warehouse receipts cover
ing readily marketable and nom
perishable agricultural products II
may be eligible for rediscount for a
maturity not exceeding nine months.
Loans on feeder stock. as distin-
guished from loans on breeding
herds. also are eligible for rediscount
with a maturity not eXceeoing nine
months Under the bill the federal
reserve board may limit the amount
of paper of six and nine months ma
TURTLES which any federal reserve
bank may discount and may pre-
scribe regulations designed 10 insure
that nine months warehouse receipt
paper marketing and not for specu-
Iative holding. The bill also seeks
TO clarity the eligibility OF notes OF
cooperative marketing associations
issued for agricultural purposes.
In order 70 encourage state banks
20 take advantage of the federal re
serve eystem, the bill reduces the
minimum capita. necessary to render
a state bank eligible lor membership
but with the provision that within
creased to the present statutory
limit The idea underlying this part
OF the bill is that new agencies
should be created where existing ma
chinery can safely carry the load
and that the redisCount facilities OF
the federal reserve system should
be used where this can properly be
done
The financing Of the livestock in
dustry. involving as 1t does a turn
over only once in two or three years
. i'm the case of breeder herds should
not. according 10 the finance corpor-
alton. be handled through the fed
eral reserve system and new ma
+ chinery must be set up In order
10 put livestock financing on a sound,
/ permanent basis il is proposed that
system OF regional rediscount cor
porations be established. to be known
as federal livestock finance corpora
. tions. along lines somewhat similar
10 the point stock land banks Any
livestock company with a paid-up
capital OF 100000 or more is eligi-
bic for membership IN the system
and Is entitled to rediscount privil-
eyes. be,DG required TO subscribe an
amount 10 25 per cent Of it's paid-up
capital 10 the capital OF its federal
livestock finance corporation
Any member livestock company ~
entitled TO rediscount paper i'm an
amount not exceeding five times its
paid-in capital stock. secured by
chattel mortgages on livestock hav-
ing a market value a least so per
cent in excess Of the face amount
OF the note. for livestock must be
inspected IN accordance with regu-
lations 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
20 three years from its original date.
The bill makes other provisions
safeguarding the capital OF the mem
Der loan companies. authorizing the
federal farm loan board 20 appoint
three Of the seven directors OF each
federal livestock corporation: regu-
lating the redisCount rate and the
rate which may be charged BY live
stock loan companies. limiting div =
dends which may be paid by federal
livestock finance corporations and
providing for the issuance OF bonds.
with a maturity Of not more than
three years which shall be tax ex-
empt only II issued before June 80.
1925
Fhe proposed bill does not at
tempt 20 set up new machinery for
general agricultural credits. but u
provides that this financing may be
done by an expansion Of the existing
banking system rather than By new
I machinery based upon the sale II
bonds on the investment market. II
Is believed by IT'S supporters. how
ever. that the financing Of livestock
Especially so FAR as breeding herds
are concerned. requires special ma