Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-10-29
FARMERS ASSISTED
BY CREDIT BANKS.
Federal Agencies Act to Re-
Iieve Stringency Caused
by Recent Drought:

Progress II being made In the drought
areas in the formation Of agricultural
credit corporations which will discount
farmers agricultural paper with the
Federal intermediate Credit Banks, and
many local banks in agricultural COM
munities have made contacts with the
Federal institutions, which may prove
helpful should there be Q necessity to
discount farmers notes with them. In
the Louisville intermediate Credit Bank
district, covering Kentucky. Tennessee,
Ohio and Indiana, 10 corporations have
been set I'D and are doing business ana
as many more are In the progress OF
organization. Indications point to q
still greater number being organized
before the turn Of the year.
These corporations usually nave an
authorized capital Of $25, 900 to 5000
and ordinarily will be able to discount
farmers notes to the extent OF six or
eight times their paid-in and unin-
paired stock and surplus, according to
the character Of the paper ohered Tor
discount. Thus provision has been made
TO bring into this district q large sum
of new" money, for the Federal In
termediate Credit Banks secure most
of the money which they loan from the
sale Of tax-exempt debentureS In the
large money centers, principally In the
Eastern cities.
New Credit Agencies.
Likewise, in the Houston Federal In
termediate Credit Bank district, which
covers the vast State of Texas, two
credit corporations have been organized
recently and three or four more are
likely to be organized in the near fu-
ture. The two recently organized will
likely accommodate the farmers with
loans of tlnree-quarters Of . million dol
lars or more, since they have capital
of $4,000 each. There are now 20 ag-
ricultural credit corporations or live
stock loan companies doing business in
the State and they have outstanding
loans discounted with the intermediate
Credit Bank amounting TO approx
mately $l4,000,000 being o larger
sum than at any time since the bank
was established in 1925. Bank ofncials
at Houston have urged the establish
ment of corporations with capitalization
of $4,000, instead of the minimum un-
der the law Of $4,000, feeling that the
larger institutions would enable them to
pay for better management. They also
stress the fact that, although they are
CA0CdNOAAA6 w NC Va ncoASONShNS ANAAAA8
the drought troubles, the banks are not
emergency institutions, but are serving
year in and year out in increasing vol
ume both by discounting farmers notes
given for agricultural purposes and by
lending to farmers cooperative mar
keting associations upon warehouse re-
ceipts representing staple agricultural
commodities.
Other Sections.
An effort Is being made in the ST.
Louis bank district, covering Arkansas,
Missouri and Illinois, to form credit cor
porations in each of the subdivisions Of
those States, rs divided by the State
Bankers Associations. One has already
been established at Pine Bluff, Ark. The
bankers in the district covered by the
Federal intermediate Credit Bank at
Baltimore-Maryland, Virginia, West
Virginia, Delaware and Pennsylvania
have shown much interest In the sub
ject of intermediate credit but to date
only one association has been organized
to meet the demand for credit due to
drought conditions. Bankers in the New
Orleans district also are showing inter.
est in the subject. Some local banks in
agricultural communities throughout
most drought districts have arranged for
a line of credit with the intermediate
Credit Banks of their district so they
may discount farmers notes with them
should the necessity arise. >