The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1923-02-24
A Timely Editorial
Government in Business
Chicago Tribune)

The contention that agriculture
needs more credit at this time, we
think, is not only erroneous, but if
acted upon, as some of the advo-
Gates of rural credits legislation
demand, will bring injury to our
basic industry, not benefit. The
unnecessarily drastic deflation from
which we are recovering seems to
have spread among farmers the
notion that easy credits are a good
thing. The contrary is true. A
loose system and loose methods
would be serious danger to the
FARMER, and he is as interested in
a system which will restrict agrl-
cultural credits within a clearly
safe field as the banker. An I'M
sound extension of credit is in the
long run an injury to the man who
receives it.
Some very radical bills have been
proposed at the present session of
congress but wifi not be passed,
though they will probably appear
at the next session, perhaps with
more prospects of adoption. The
well considered Capper bill will and
ought to be enacted, and also prob
baly the Strong bill, which in
creases the limit on Federal farm
loans. But third measure, known
as the Lenroot-Anderson bill, which
may be passed, does not commend
itself, in our judgment.
This bill amends the federal farm
loan act by establishing in each
federal land bank a separate farm
credits" department with $5,000,-
600 as capital provided from the
federal treasury, $50, 100000 in all.
These departments are authorized
to discount for or purchase from
any national or state bank, trust
company, rural credit corporation,
incorporated livestock or farm cred
it corporation, savings institution,
cooperative bank or credit asso-
citation, or cooperative marketing
association of agriculture produ-
GERS, or any other federal land
bank, with it's Endorsement, any
note or similar obligation, the pro-
ceeds of which have been advanced
or used for certain purposes. Loans
may also be made, subject to certain
restrictions of the farm loan board,
direct to cooperative associations,
if the notes or obligations are Sc
cured by warehouse receipts or
chattel security. The federal land
banks are empowered, subject to
approval by the federal land board,
to issue and sell their collateral trust
debentures with maturity of not
more than five years. The deben-
lures are tax exempt, as in the case
of farm loan bonds. Other provis-
ions need not be given here.
In our opinion, tie basic objec-
tions to the Lenroot-Anderson plan
are that it is an unnecessary extern
sion of government operation into
private industry, and that the ex-
tension is in form which promises
incompetent management. In other
words, the bill sets up with govern
ment capital new banking agencies
which will be manned by a mediocre
political personnel and which will
not in practice prove to be efficient
instruments, though endowed with
considerable powers.
In our opinion, the Capper bill
will provide all added facilities re-
quired by legitimate agricultural
credit needs and do so in a manner
consistent with the financial sound
ness OF agriculture and the nation,
while the Lenroot-Anderson bill
provides an uncalled for and prob
ably incompetent extension of gov
eminent.
Why not wait to see whether the
Capper measure does not meet the
| credit requirement OF the farmer
before embarking upon the dubious
extensions of government machin-
cry. provided by the Lenroot-An-
derson bill?
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Inn ANyD MT