Evening star., 1927-04-14
NEW FARM RELIEF
PLAN BEING MADE
BY ADMINISTRATION
Loans to Regional StabiliZa-
ton Corporations by Gov
ernment Proposed.
OVERWHEL MING FAVOR
IN CONGRESS EXPECTED
Presidents Conference With Nc
Nary Was One Of First
Steps in Problem.
RY DAVID LAWRENCE.

InG I i-0OIIuSe administrator mas lt-
termined on q plan to solve the prob.
lem of farm relief. Details are not
yet ready for announcement, but are
being worked out in conferences be.
tween the Secretary of Agriculture,
William M. Jardine, and the leaders
in the agricultural industry.
Instead of being forced to take the
defensive with respect to the McNary-
Haugen bill, the administration is
preparing to submit it's alternative
plan and to win support for the idea
between now and next December so
that the measure as finally proposed
will go through the Senate and House
by overwhelming votes.
Curtis Crisp Bill Involved.
The conference between President
Coolidge and Senator McNary of
Oregon was one of the first steps
taken, and while the first published
reports spoke of a compromise"
being worked out, the truth is that
the plan now being taken up Serl-
ously by the administration involves
some of the best features of the
Curtis Crisp bill, as well as some of
the ideas of the McNary- -Haugen bill.
But in essence it is an altogether
different solution from what hereto
fore has been suggested.
In brief, the idea Is to get at the
whole agricultural problem by means
Of credit. 1t is the readiness of some
agency to buy crop at a moment of
distress and panic which keeps a price
from falling, and that agency must
have sufficient funds to back up its
decision The Government itself can
not enter into the business of fixing
prices or buying crops. That has
been the stumbling block all along.
But there is no objection to the same
thing done by private corporations
with funds borrowed from the Govern
ment.
Regional Boards Planned.
In other words, several regional
stabilization boards or corporations
would be set up. These would not be
in any way appointed by or created
by the Government. But the Govern
ment would not lend it's money to such
a corporation unless it is set up with
certain types of men in 1t, namely an
experienced banker, an experienced
merchandiser of the crop in question
and representatives of the farmers
who know how to deal with the CO.
operative organizations and inde-
pendents.
In the case of cotton, for instance,
there might be only one stabilization
corporation. AS for wheat, three diff
ferent corporations might be set up
to take care of the different phases of
wheat production in different sections,
These regional corporations would be
in the nature of the holding COM
panies that have characterized the OPP
erations of big business in recent
years, in that they would act for
groups of organizations and compa-
nies engaged in agriculture. 1t IS
suggested that these stabiliZation COR
porations need have only a small
amount of capital, but it would have
to be furnished by private citizens.
Would Lend at Proper Time.
Then at the proper time whenever a
price was falling and it was necessary
to begin to buy the farmers crop and
hold it as against a falling market, the
Federal Sterilization Corporation in
Washington would lend money to the
regional stabilization corporations.
This credit would extend over two or
three years-long enough to enable a
particular crop to work out its carry
over problem.
The Federal Government would not
actually buy any crop, but would lend
the money just as a banker would.
Part of the funds. in fact 65 per cent,
would be supplied by the Federal in
'ermediate banking system, which is
already authorized by law to make
such loans.
The other 40 per cent would be pro-
vided by the new Federal lending
machinery. Whether the present War
Finance Corporation will be converted
into a huge Agricultural Finance
Corporation or whether the Federal
Farm Loan Board will be reorganized
so that a separate division can be
maintained for the purpose of making
loans to the regional stabiliZation
corporations has not been worked out,
but the Government would probably
issue bonds or certificates of two or
three years maturity to take care of
such loans as were made to the
stabilization companies.
Psychological Factor Seen.
1t is estimated that the total revolv-
ing fund that might be used would
not exceed $3.50 900 900, but the
readiness OF the Government to lend
the money and the readiness of the
stabilization corporations TO buy the
crop at prices that will in many cases
anticipate a higher return later on
are expected to be psychological
factors in keeping the farmer from
dumping his product suddenly and
contributing to the decline.
The new plan really does not differ
in principle from that which is in
vogue in the Federal Reserve bank
ing system, which in effect stabilizes
the price OF money through it's con
troll OF gold reserves and rates OF
redisCount.
The submission of the plan at ar
early date is expected to be an i'm
| portant factor in the political stu
alton, for the main criticism of the
! administration heretofore has beer
| that by vetoing the McNary Hanger
! bill it acted in a negative way anC
/ did not actually use its power ant
/ influence to get an alternative bill
! passed that would accomplish TIL,
same detectives. The test of the ad
ministration plan is whether it will dt
what the McNary -Haugen bill set ou
! to do. and administration leaders are
! confident that il will do this anC
more. They assert it is a permanen
solution with all the fiexibility of tn,
| Federal Reserve banking system ant
all the advantages that have prevent
ed panics in the banking world.
Copyright. 1927
-------a a----------
Radio Programs-Page s.