, 1923-10-18
Relief to Producers

Rumors discrediting the operation of the fed
eral warehousing act of purely political origin
are being widely circulated at this particular
time. They may be set down as ninety-nine per
cent false. This government activity is being con-
Quoted with credit and functioning as was in.
tended for the good of the farming element of
our population, and all others desiring relief
under its provisions.
One of the rumors circulated was to the effect
that the department of agriculture had refused
to issue rules and regulations governing the
storing of grain and other products in federally
licensed warehouses. The fact of the matter is
that rules and regulations for warehousing
grain under the federal act were issued by the
department in 1919 and are still in force. 1t is
pointed out that the department has nothing to
do with the many state warehouse laws in exist
ence but it is felt that these malicious reports
have had their effect in Gripping activity under
state statutes.
The mind of the farmer again has been con-
fused by reports that he is permitted under the
federal law to store his grain in cribs and gran
aries under his own control. 1t has been charged
that Secretary Wallace refused to grant this
phase of the law. That this is so is farthest from
the facts. The department promulgates rules
and regulations governing the operation of fed
orally licensed warehouses but it has no auth
GRITTY to change or modify in any way the pro-
visions of the act.
Under the provision of the act an Individual
farmer cannot secure a federal license for his
cribs and granaries when they are retained un-
der his own control. However, it does say that
groups of farmers may organize n warehouse
company and transfer the control of their cribs
to the company and thus come under the law.
The department is eager to advise with any
groups of farmers may organize a warehouse
~ization.
In sending out this information the depart
ment takes occasion to make plain the provis.
ions and advantages of the act. The principal
advantage to farmers is that they are enabled
to borrow money on the warehouse receipts rep
resenting the products stored in the federal1y
.-.---I ----I,-o- nh IN.., IL % l. -.
ceipts depends upon the commodity and its
grade and upon the banker who is asked to make
the loan. On grain and cotton bankers have been
known to loan as much as so per cent of the cur
rent market value of the product.
Briefly stated, the advantages to a farmer of
storing his products in a federally licensed ware
house rather than on his farm are: as security
for loans the warehouse receipt makes it pos
sible for the farmer to borrow on the loan value
of his product rather than on his personal re-
sponsibility; it gives him a larger amount of
credit; it gives him a larger field of credit upon
which to draw; it places his product in the
hands of the warehouseman who is presumed to
know how to keep it from deteriorating; gener-
ally he can obtain a lower insurance rate, and
the placing of his product in a federally licensed
warehouse means that he can get 1t on the mar
ket at any time regardless of weather or condi-
tions of roads.
The worst enemy OF the farmer and Of the
warehouse act is he who endeavors to modify the
present regulations for federally licensed ware
houses so as to create in the minds of bankers
and government financial agencies, such as the
War Finance corporation, a doubt as TO the
value of loans made on warehouse receipts.
There is not the least doubt that any move to
permit farmers to store their products in cribs
or granaries not having a federal license would
destroy absolutely the value of the warehouse
act, would seriously impair the usefulness of the
agricultural credits act, and would cause n loss
of untold millions to the farmers who listened
to this evil advice.
Some idea of the growth of federal warehous.
ing is obtained from the records which show
that on April 1, 1921, there were only 56 ware.
houses licensed by the federal government to
store grain, while on June 30, 1923, there were
231 federally licensed warehouses authorized to
store grain.
When the present administration came into
power there were no warehouses having federal
licenses with authority to store tobacco upon
which loans were to be made on face of receipts.
Today there are 81 federally licensed tobacco
warehouses with n total capacity of 219,A75,00O
pounds. These are in addition to the hundreds of
warehouses that are operated in various states
under state warehousing acts,