The Washington times., 1923-07-07
HOW PANIC WAS
| AVERTED TOLD
BYSTAREK
War Finance Corporation in
1922 Saved Farmers,
.- Says Director.
By FRED STAREK,
Director Of the War Finance
COrDOratiOn.


Corporation.
written for and Copyrighted, 1928, by
International News Service.)
The American genius for the use
of superlatives is well known, yet
| only such terms characterize ade-
quately the magnitude, speed and
| the success of the operations of the
War Finance Corporation in help
/ ing agriculture during the crisis of
If921-1922 and in putting farmers in
position to make the most of the
present more favorable conditions.
AS shown previously, when the
agricultural credits act was passed
ir August, 1921, farmers were in .
| desperate plight and few people be-
lieved the corporation would be able
to do anything effective before ruin
overlook the whole agricultural in
dustry.
At that time the corporation had
only a very small force located in
Washington, and it had no field or
ganization and little experience in
| handling large scale agricultural
finance. In less than two months
an auxiliary banking system with
thirty-three agencies in the various
producing centers throughout the
United States had been built up,
each one in charge of leading bank
ers and business men, who were
giving their time and ability to the
| work without compensation and in
the spirit of public service.
Lent Two Millions q Day.
In less than five months after the
passage OF the act the corporation
was making loans at the rate of
$4,000 900 a. day. From August to
November, 1921. it approved loans
for agricultural purposes. including
exports, totaling more than $780,
100000 from. November, 1921, to
November, 1922, the total amounted
to over 1858, 900. Altogether,
UP to May Is of this year, the cor
poration. had approved loans
These loans were distributed in
thirty-sevcn States and covered a
great variety of agricultural COM
modities, such as live stock in the
West and Southwest, cotton in the
South, grain in the Northwest,
Middle West, and Southwest; pea
nuts in Virginia, tobacco: in In
diana, Ohio, North Carolina, and
neighboring States, and rice in
California, Louisiana, and Arkansas.
It. was of tremendous advantage
that the corporation was empow-
cred to conduct it's activities on d
nationwide scale. Because it was
able to harmonic it's activities
with the needs of the various sec
lions of the country and to direct
it's efforts toward the restoration
of more normal conditions through
out the nation the beneficial eff.
fects Of it's oprations rapidly be-
came cumulative. Corn and hogs,
sheep and cattle, wool and cotton
and most of our staple agricultural
products are sold in national mar
kets. The Strengthening of each
weak spot in the situation was
helpful in the other sections as
well.
Confidence Regained.
Agriculture and business gener-
ally are not only in better con-
dition so far as tangible factors
such a prices and markets are con-
cerned, but they have regained to
remarkable degree the intangible
but no less essential asset of con-
fidence. In reviving confidence in
farmers and business men alike the
corporation has shown even greater
results than its activities in the
lending of money in the agricul-
tural districts. Congress recog-
niZed this fact at it's last session
when it extended until March, 1924,
the time during which the corpora.
ton may make new loans. It was
realized that the corporation had
come to represent an economic re-
serve tested in a time of acute dis
tress and found in actual practice
to be capable and efficient in meet
ing the needs for which it was
created. But other agencies are
now in process Of organization to
assist in the permanent financing
of agriculture created by Congress
last March), and while they are
yet to be tried in actual practice,
it is confidently expected by those
who advocated them that they will
serve the desired end.
Meanwhile the corporation, with
it's experience, it's effective organi-
zation and its ample funds, is the
Governments guarantee that no
gap will be left in the machinery
necessary to assure adequate finan-
cling to the farmer and stockman.
obviously it is not it's part at pres
| CAib " " Increase l1S DUST
ness. On the other hand, it is in
no sense pressing for the liuuida-
| ton of it's loans, and although re-.
payments have been flowing in a.
a gratifying rate they are for the
| most part voluntary and are the
natural result Of better economic
and financial conditions.
Loans Repaid Rapidly.
! But the corporations success in
making loans speedily, in directing
them to the spots where the need
was the greatest, was no more re-
lnarkable than the way in which.
after the crisis had been bridged
the Governments money has been
returning to the Treasury. AS early
as January Of last year the repa "
ments for the month had reached
nearly $4,000, 900; in March, 1922
they were more than SO, 1000, 900: and
from then on repayments fluctuated
between nine and twelve million dol
lars a month until, in October and
November, they averaged more thar
fifteen million dollars.
Altogether by June ], 1929. moro
than $177 1000. 900 had been repaid IN
the corporation. The flow of liou1.
dation continues unabated ar the
present moment and, as already
pointed out, is an indication not onlv
or the sound business Methods used
by the corporation in making these
loans but is convincing evidence thai