The Raymer enterprise., 1923-07-12
EDIsON-FORD PLAN
UNFAIR TO FARMER
Third Article Shows How Credit
Test Would Fail Him In
!! His Need.

= Tho 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
Il the third In q 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
as 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 the prod
ucts for the previous twenty-five
years. On the other half Of the value
the producer would receive certin
Gates which he could sell or use for
bank loans.
Restricted Credit
In that provision allowing for Gov
ernment loans only up to half the
average value for twenty-five years
Mr.. Foster fnds 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
ent 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; II involves unjust discrimina
tion." Mr.. Foster says "The Edison
plan FIXES the loan values OF all prod
ucts absolutely. uniformly and arbi.
trarily. II Ignores the relative pros
poets OF different commodity markets
Only by the merest chance would sucL
Q method give 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 10
not concerned
Banks Fairer to Farmers
"The general practice OF the banks
b not only falrer to farmers. but 1t ls
sounder business. There is no justi
Acation for basing the loan value Of
anything upon "verage prices In past
years. Sound banking practice looks
b the future. A bank-for the pro
lection Of Its depositors. II for no
other reason--must consider above
everything the prospects Of getting
it, money back. And farmers pros,
pscts Of repaying a 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 10 nothing In the Edison
plan that would tend to abolish spec.
ulation. Even after the farmer had
stored his products and obtained a
loan from the Government. he would
still be free to sell his products out
right 10 spectators. The farmer
would have all the inducements to sell
that he has today, and spectators
would have all the inducements to
buy.
Clearly. then. the Edison plan
would not provide a money that is
sornder than gold money: II would
not provide money less subject TO
nuctuation In value; II would not en-
able farmers TO obtain larger loans
than they can now obtain. 1t would
not divorce agriculture from the
banking system: and II would no;
eliminate speculation In farm prod
ucts."