The Rathdrum tribune. (Rathdrum, Idaho) 1903-1963, 1923-08-10

ED|SoN-F0RD PLAN
UNFAIR TO FARMER
Third Article Shows How Credit
Test Would Fail Him in
His Need.

The unfairness to the farmer OF
the Edison-Ford commodity money
scheme, although ostensibly aimed to
improve his economic position, Is dis
cussed in the present article, which
is the third in series prepared by the
American Bankers Association, re-
viewing the exposure OF the weak
nesses Of the plan as presented by
William T. Foster, Director OF the
Pollack Foundation for Economic Re-
search.
Briefly, the plan, sponsored by Thorn
~ Edison and Henry Ford, would pro-
vide for Government warehousing OF
basic commodities, against which cur
rency would be loaned, during storage,
to the producer without interest, up to
half the average value Of tho prod
ucts for the previous twenty-five
years. On the other half of the value
the producer would receive certif-
Gates which no could sell or use for
bank loans.
Restricted Credit
Ii chat provision allowing for Gov
eminent loans only up to half the
average value for twenty-five years
Mr.. Foster finds particular weakness
in the scheme. He points out that
prices have risen so high since 1896
that the farmer could borrow on most
products much less than half the pres
emit value of the products-much less.
in fact, than he could borrow directly
from the banks. Loans on the other
half the value. which would be on
virtually second mortgage basis, he
says, would not be desirable for the
banks
THE plan is not fair even to farm
ers; It involves unjust discrim1na-
tion," Mr.. Foster says. 1.-THE Edison
plan fixes the loan values of all prod
ucts absolutely, uniformly and arbi-
trarily. It ignores the relative pros
poets OF different commodity markets
Only by the merest chance would such
q method give a fair loan valuation.
Fifty per cent of the average price
for the previous twenty-five years
would be too high for some commodi-
ties and too low for most OF them.
With such details the Edison plan IL
not concerned.
Banks FAIrer to Farmers
1.-THE general practice Of the banks
Is not only fairer to farmers, but 1t Is
sounder business. There Is no justi-
fication for basing the loan value OF
anything upon average prices In past 4,
years. Sound banking practice looks
to the future. A bank-for the pro-
lection of Its depositors. II for no
other reason-must consider above
everything the prospects of getting |
Its money back. And farmers pros
poets OF repaying loan from the sale
Of his product depend entirely on fu /
ture prices, not at all on past prices. !
Last years runs do not count in this
years game"
As to the claim that the Edison
plan would curb speculation In farm
products. Mr.. Foster says:
There Is nothing in the Edison
pAou Ludt WOuiQ toAo " dDOAisA oPCS'
llation. Even after the farmer had
stored his products and obtained a
oan from the Government, he would
still be free to sell his products out
light to spectators. The farmer
would have all the inducements to sell
hat he has today, and spectators
would have all the inducements to
,uy.
Clearly. then, the Edison plan
would not provide money that Is
founder than gold money: 1t would
lot provide a money less subject to
In value; 1t would not en-
BILE farmers to obtain larger loans
han they can now obtain; 1t would
ot divorce agriculture from the
anking system; and 1t would not
Intimate speculation in farm prod
cts"