The Bozeman courier. (Bozeman, Mont.) 1919-1954, 1923-02-14
\ FdmlllI a E|:'!Igs,

,ures of this country must be sold
abroad, and in responIe to weakening
markets the practicable and prompt
voluntary curtailment Of production
by farmers is narrowly limited This
is not due merely to the restricted
range Of alternative uses to which
farms and their equipment may be
applied, but in part also to the time
element in crop growing or livestock
raising. 81 '-o~.s
~ ia
The major part Of the exports of
American farm products is sold in
Europe. At best it will require some
years for economic recovery. there to-
restore approximately normal indus
trial conditions. And tariff rates
which unduly restrict the market here
Tor the products of European indus
tries inevitably limit the European.
demand for our. foodstuffs and raw
materials of manufacture.
Of the many bills before Congress
dealing with rural credits, one, en-.
titled Federal Live Stock and Agri-.
cultural Loan Act, has been passed
by the Senate. 1t provides for a sys-
TEN of privately financed agricul-
turall credit corporations, with a min
imum capitalization Of $250s000 each,
under the supervision of the comp
troller of the currency. Rediscount
corporations in the larger centers,
with a capitalization of S 1000, 900 or.
more each, also privately financed,
would raise money by the sale of de-
bentrures, are authorized. The cor
porations would be authorized to pur-
chase or discount paper with a matur-
ity not exceeding nine months, Sc
cured by warehouse receipts covering
readily marketable and non-perisha-
bic agricultural products or BY chat
tel mortgages on livestock being fat
tened for market; and paper with p
maturity not exceeding three years
secured by ehattel mortgages on MAJ
turing and breeding livestock
The bill would empower the Fed
eral Reserve Banks to discount agri-
cultural paper with a maturity OF
nine months or less. 1t is argued that
owing to the. length of the growing
season loans for productive and mar
keting purposes for as long as nine
months are necessary, and that the
eligibility of such paper for discount
is eslential to a ~well-rounded rural
credit system.
r. On the other hand, the extension Of
the maturity of eligible agricultural
paper from six months to nine IS OPP
posed on the ground that it would rer
suit in diminishing the liquidity OF
the Of both member banks
and Federal Reserve banks. A fur
| ther contention is that it would un
duly the speculative WITH
| holding of commodities from market
| Another criticism of the bill by op7
ponents is based on the belief that the
! proposed system of credit institutions
IS not sufficiently comprehensive, tina
it's benefits to other tkan livestock
interests would be inadequate.
AS additional inducement for state
banks to become members of the FED,
! eraI Reserve system, the bill would
permit the payment of larger DIVE
! dends on the stock Of Federal Re-
serve banks and the minimum capital.
ization of country required for ellgi.
bility is temporarily lowered.
Another. bill reported to the Senate
/ embodies some Of the features of the
| first, notably the proposed extension
of the maturity of agricultural paper
eligible for discount to nine months
It attempts also to make membership
in the Federal Reserve system NOR;
attractive to the state banks.
The chief distinguishing feature o.
this bill is that it would establish
system Of personal credits to be con
Quoted by the Federal Farm LOAF
banks, with $500 900 of capital
SIS, 900 900 for each bank, supplied b.
the Recommendations funds t
be raised by the sale of debenture
to an amount not exceeding ten time
l the capital. By this means, 1T
thought, adequate facilities woul
4 more surely be provided than if rel
! ance is solely upon private institu
tons.
This plan is open to the objectio
n already noted, that it further inject
! the government into the business {
banking. Opponents of the measur
contend also that the proposed IT
gional segregation Of the loanabi
funds would not be in harmony wit
the respective needs of the severi
T. districts.