Evening star., 1926-11-21
GOVERNMENT AIDS
COTTON BY CREDIT
General Satisfaction Over
Situation Is Expressed.
Meyer Is Utility Man.
By DAVID LAWRENCE.

General satisfaction 10 expressed
here that the Federal Government, In
cooperation with the leaders OF the
cotton industry in the South. mas man
aged to break the psychological panic
which seized the cotton growers when
the Government estimates OF over
production were first revealed.
Not only has the market price or
cotton been maintained through the
period Of adjustment, but even in the
face of increased figures as to the
total supply there has been an effec-
tive resistance against further price
decline.
Just how has this been accom-
plished?
The Government itself has not in
troduced any new form of subsidy
nor has 1t sponsored any OF the princi-
pies Of the McNary Haugen plan,
though the problem essentially was
one Of dealing with a surplus produc'
ton. The appointment by President
Coolidge OF q cotton committee, Nheaded
by Eugene Meyer, 5r., was the nrst
step.
Then the committee visited impor-
tant cotton States and encouraged
the formation Of associations which
raised $4,000. 900 for lending pur-
poses. The Government then under
existing laws placed $160,000,000 OF
credit in the hands of the cotton
farmer through the intermediate
credit system. Government experts ap
praised the true value of the cotton
crop and showed that the total
amount of credit that would, be ex-
tended was we'll within the limits OF
a good risk. This atmosphere OF
confidence gave the whole cotton
situation a new aspect.
Confidence Is Keystone.
While the credit machinery has
ALWAYS been available. it was the con.
fidence disseminated by the Federal
Government at the opportune mo-
ment, which is now being empha-
sized as a turning point in the crisis.
The incident is not unlike the sltu-
alton which arose in the cattle in
dustry when the War Finance Cor
poration few years ago extended
it's aid Indeed Mr.. Meyer, as chair
man of the War Finance Corporation.
has indicated in his report that
whenever the Government has ex-
tended credit through agricultural
associations. there has been virtually
no loss 70 the Federal Treasury.
The War Finance Corporation has
really very little work to do nowadays
except to watch collections on a relar
lively small sum that is outstanding
President Coolidge has the greatest
confidence in Eugene Meyer. and feels
that whenever an emergency arises
involving the use of Government cred.
it, he can send Mr.. Meyer to the scene
as his personal representative. Thus
the chairman of the War Finance Cor
poration has become a utility man for
the President in the handling OF spe-
cial agricultural problems.
Estimates Are COIrobOrated.
It is significant, incidentally, that
the talk which arose several weeks
ago about the inacculacy or the GOV
ernment estimates has died down. 1t
had been expected that when Con
gress reconvened some move would
be made to abolish Government fore
casting of the cotton crop, but onl-
cials now do not expect such a. turn,
because they feel that the estimates
have been corToborafed.
UnQuestionably there will be discus
sion Of the whole cotton situation in
Congress. with view to preventing a
cotton panic whenever the cotton fig
ures are announced. Plans for next
wear, of course. are being urged SO
that a diminished acreage will be
planted and diversification practiced
The problems in this respect are not
unlike those which the Government
faced with the wheat farmers. as ii
is very easy to make such plans, but
not so simple to persuade the farmer
to follow them. On the whole, the
Government feels that the cotton sit
uation, while not at all a happy one,
Is far better than might have been
the case If the leaders OF the cotton In
dustry and the bankers had not work
ed ont the present plan in co-opera-
ton with the Presidents cotton com
mittee.