Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-09-26
FEDERAL RELIEF
POLICY AGGRESSIVE
Three Agencies Join in Put
ting Money to Work for I'm.
employed and Farmers.
By DAVID LAWRENCE.

Three governmental agencies hase
joined hands In putting money to
work% for the befeht Of the Nation's
purchasing power on the one hand and
the needs Of agriculture on the other.
Behind the three announcements that
came this week from the Federal Re-
serve Board, the Federal Farm Board
and the Federal Farm Loan Board.
stating that their resources are being
made available for the marketing OF
the countfy's crops at the lowest rates
in the history OF the Federal Reserve
System" lies a story of an aggressive
rather than a passive policy toward the
use of funds that can be loaned to
the cotton farmers.
Heretofore the governmental loaning
agencies have coY1tented themselves
with the simple statement that funds
are available, but today the interrne-
date credit banks are actively solicit
ing all banks and agricultural credit
corporations in their districts in an
effort to furnish money so that cotton
may be carried by the farmer for a
better price.
First Step in Program.
The cooperation of the three big
agencies OF finance in the Government
Is the first step in a program of accei-
Grafton which has just been determined
upon as a means of assisting one of
the basic industries of the Nation
namely, agriculture, on whose puTchaS-
ing power the rest of the Nation Is
dependent.
The initial move came in the decision
Of the Farm Board to carry until next
August through the cotton sterilization
corporation about 1 100000 bales unless
in the meantime the price advances TO
or above the purchase price. This means
that the quantity hanging over the cot
ton market, which has been source of
apprehension, is definitely removed
from consideration. Secondly, there
came the announcement from the Fed
eral Farm Loan System that its inter-
mediate credit banks were ready to
advance about IS per cent of the market
value of cotton II such percentage ex-
ceeds nine cents.
Cotton farmers desiring to avail
themselves of this opportunity have
been advised to apply to any banking
institution or agricultural credit corpo-
ration in their localities which has or
obtains the privilege of doing business
with the Federal intermediate credit
bank.
The intermediate credit banks have
ample lending capacity, and the Federal
Reserve system stands back Of, them
because the latter is authorized to pur-
chase debentures issued by the inter
mediate credit banks.
Government Shows Faith.
Readiness on the part of the Govern
ment to lend cents on q bale Of cot
ton is an indication of the faith the
Government has in the ultimate rise Of
the price above its present level In
deed, the Government policy Is based
on the conviction that, since cotton q
selling below the cost production, there
will be q drastic curtailment Of the
cotton supply, even with the carry
over, unless cotton prices are rectified
Feeling this way, the cotton farmer Is
urged to carry his cotton for a better
price and in the meantime II he needs
money he can borrow practically three
fourths Of the value OF his crop while
he holds his product.
Withdrawal Of the Governments own
purchase Is expected to improve the sit
uation shortly, and while the lending
policy just announced will take q little
while 10 Be effective it differs from
any other step taken of this kind, in
that instructions have been issued to
so out after the cotton loans. Should
the farmers take advantage of these
Offers, and they can do so at remark
ably low rates Of interest, the effect will
Be to put money to work or, in other
words to get It into circulation, and
thus help the whole economic circle.
(Copyrieht. 1890