Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-02-08
HYDE SAYS RELIEF
PROBLEMS SOLVED
Explains Seed Loan Rider to
Chairman Wood as
Avoiding Dole.
BY the Associated Press.

BY the Associated Press -
Secretary Hyde, who will administer
the relief agreement which broke a
deadlock between the administration
and a congressional coalition, described
the measure last night as one which
''avoids doles or direct charity from the
Federal Treasury, or any implication
thereof"
"A letter from him to Chairman Wood
of the House Appropriations Committee
was read in the House by Wood.
The letter outlined the methods by
which the Secretary plans to distribute
the funds and told of the banking sit
uations to- be met to rehabilitate the
farmers.
Held Credit Problem.
The letter follows: /,
Dear Mr.. Wood: Your request for
my views upon the pending amendment
to the seed loan appropriation has been
received.
THE proposed measure is intended to
take care of another phase Of the credit
problem in the drought-stricken area
which is economic in character and not
covered by other services.
1.-The critical situation in the drought
area arises not only from the drought
but also from the weakened banking
situation. There are two phases of the
whole problem:
First. relief to the distressed who
have no resources and, therefore, no
security to offer for loans.
Second, the provision Of adequate
credit for those who can offer security
for loans to enable them to carry on
their usual operations.
Red Cross Aid Adequate"
''The Red Cross is adequately caring
for the needs of the first class The
appropriation already made of $45,-
100000 for seed, feed and fertilizer
loans, to be secured by liens on the
crops, will provide for large number
of the second class.
There remains the general problem
of furnishing essential credit to those
who have security, but who cannot OBJ
tain it because Of the breakdown OF
normal credit facilities.
THE requirements are to be met in
two ways:
First, secured by loans to individuals
of capital to assist them to strengthen
the existing agricultural credit cbrpo-
rations or to st UP new agencies which
can in turn operate through the inter-
mediate credit banks, and second, by
other emergency loans on adequate Sc
curity to be made by the Secretary OF
Agriculture.
System Has Collapsed.
"A part of the normal agricultural
creoit operation in the drought area
consists in financing from month to
month by the landlord of his tenants.
This financing goes to buy food and
clothing, as well as for other purposes.
It is principally this system which, due
to a weakened banking structure, has
broken down, thus dcpriving the COM
munity of the credit essential to eco
non1ic recovery.
The provision in the pending bill
would answer the needs of all Of these
who can offer security. It will relieve
the burden upon charity by aiding to
restore normal credit con itions 1t
leaves to the Red Cross the respon-
sibility in the field as agent for human
relief to those who Go not have security
and to whom Government loans for
food such as were at one time proposed
would have been mere charity by Great
ing obligations from large groups far
beyond their ability to pay.
Bill Has 3 Aims.s
This situation was foreSeen last
September when the President called a
conference of bankers in the drought
stricken States and recommended that
agricultural ere, it corpora tions be
formed to function under the inter-
mediate credit system. The bankers
undertook to assist in the creation OF
such corporations and a number of
them were formed. but not to the num-
Der or strength which is now necessary.
THE present bill rounds out the
program of economic rehabilitation in
much better fashion than the legisla- 1
tive proposals heretofore made. It fills
out the pattern of measures necessary
In the drought territory:
First, human relief by the Red Cross
to farmers and to industrial people who
have no resources in the drought region.
Second, loans for seed and fertilizer
secured against the coming crop.
And finally, this last provision med
to restore credit facilities for those who
have security to offer.
This program avoids doles or direct
charity from the Federal Treasury, or
any implication thereof"