Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1923-03-24
WORKING Of FARM
CREDITS EXPLAINED
BY SENATOR HARRIS


Senator William J. Harris, Just
arrived from Washington, on We'd
aesday gave out an interview ex-
planning the workings OF the farm
credits legislation enacted at the
session Of congress recently closed,
and predicting that the farmers of
Georgia and the south generally will
derive very substantial benefits
therefrom.
Senator Harris is back in Georgia
on a vacation from his duties in
Washington, which he hopes will
last until December, when congress
conVenes again in regular session.
He has made speaking engagements
which will take him into sixty south
Georgia counties beginning March
&c and ending June 2. On this
speaking tour he intends to present
facts concerning the legislation he
has introduced or supported for the
benefit of the agricultural and bust
ness interests.
Senator Harris expressed the opin-
ion that the farm credits legislation
enacted at the session just adjourned
| will very substantially benefit the
farmers of Georgia and the south in
general. 81.
1.-The principal feature of the farm
credits legislation" said Senator
Harris, "is. that which provides for
the organization of twelve federal
international credits banks. They
are to be located in the same cities
where the twelve federal farm land
banks are located, which means that
the bank in our territory will be To-
Gated in Columbia, S. c. They are
to be administered by the federal
farm loan board in Washington.
New Banks Bridge Gap
"These federal intermediate credits
banks will function for the purpose
of bridging the gap between the
farmers and the federal reserve sys-
tenn. They will engage in the bust
MSS of rediscounting paper of farm.
ers, the proceeds of which go to the
making of crops or the production
Of live stock.
1.-THE government will subscribe
100000 to the capital stock of
each bank. The banks will have au-
thority, as their credit requirements
expand, to issue debentures paying
an attractive interest rate and ex-
empt from taxation, federal and 9th
erWiSe.
"The federal intermediate credits
banks will rediscount the farm pa
per of any band which indorses such
paper, and the banks are not re-
quired to subscribe to the capital
stock of the federal intermediate
credit banks, or otherwise to become
member banks in the sense that
banks become members of the fed
eral reserve system. Farm paper
running for a period of nine months
is eligible for rediscount. Interest
rates to be charged by the interme-
date banks are regulated by the
act and interest rates to be charged
local banks are likewise regulated,
indirectly but effectively. Farm pa
per which has been redisCounted by
an intermediate bank is eligible for
rediscount in a federal reserve bank,
whether the originating local bank
be a member of the federal reserve
system or not.
'ln addition to rediscounting farm
paper for local banks, large or small,
the intermediate bank is authorized
to rediscount farm paper offered by
farmers cooperative associations,
such as the Georgia Cotton Growers
Cooperative association and the sim"
liar cooperative associations of cane
growers, peanut growers, pecan
growers, etc.
Difficulty Overcome
1.-The main difficulty with the
federal reserve system, from the
standpoint of the farmer, is that
a majority of the banks with which
farmers do business are not mem
bers Of the federal reserve system,
and the notes of farmers discounted
by such banks are therefore not
eligible for rediscount in federal re-
serve banks, even though they bear
the Endorsement of intermediate
banks which are members. Thus a
very large proportion of the agri-
cultural community has been cut
off from the benefits Of the federal
reserve system.
"The federal intermediate credit
banks, created by the legislation en-
acted at the session just closed,
bridges over this. gap by allowing
these new banks to re-discount the
farm paper of any local bank. The
only requirement Of such local
| bank is that it shall submit to an
audit at any time the federal inter
mediate credits bank sees fit tC
make one.
Summing 1t up, the federal inter
mediate credits banks will perform
substantially the same function fol
! financing the operating require
ments OF the farmers as the wal
| finance corporation has performed
| in the last two years. Without the
war finance corporation, which was
revived, and put in operation over
| the violent opposition, which wa:
| the violent opposition of some Demo
| cratic senators who ought to have
! had better sense and less arrogance
| than to oppose it, disaster would
| have overtaken thousands OF farm
ers and hundreds of banks not only
| in the cotton belt, but elsewhere
| throughout the agricultural sections
| Of the country.
1--WE made provision for the wal
| finance corporation to continue
| functioning until the federal inter
| mediate credits banks should get II
! full operation. I am pleased to learf
| that the intermediate bank in oul
district, at Columbia. S. c., is ready
| 10. start business now. We tried tf
get this bank located in Macon anC
Atlanta gave US her full support
| but we did not succeed.
Clearance Forced
"A bill introduced in the. senate
by myself and III the house by Rep
resentative Brand. Of Georgia, was
what enabled the intermediate banks
TO re-discount the farm paper of al
| local banks. large or small without
membership requirements. such as
those imposed by the federal reserve
act. I'VE believe this bridging of the
| gap will be OF enormous advantage
| TO the farmers. since the backbone
| of cur agricultural credit system is
in 10Oal hanks which MOI