Evening star., 1933-10-07
ORDERS
CREDIT FARM AID
Corporation to Be Created
Immediately to Lend on
Crop Security.

BY the Associated Press.
Immediate creation Of a credit cor
poration to lend to farmers on crop
security has been ordered by President
Roosevelt in the first concrete move in
his latest effort to raise commodity
prices and increase farm purchasing
power.
Personnel Of the corporation is being
considered today at the White House.
The new agency will have an initial
capitalization Of $4,000, 900 and its first
duty will be to carry out the admin
istrations promise to lend cotton farm
e-s 10 cents pound on their present
crop If they agree to join in the cam
paign designed to reduce acreage by 40
per cent next year.
The corporation will have authority
to lend on other commodities, but cot
ton is the only crop now being con-
sidered for benefits.
The agency will be responsible to
the President and Secretary Wallace
probably will be member.
Will Borrow From r. F. c.
Announcing the plan at his press
conference, Mr.. Roosevelt said the S.
100000 capital would come out of the
Farm Administrations surplus crop
control fund and money for the loans
would be borrowed from the Recon-
struction Finance Corporation.
The loans, to bear interest at per
cent will he made at the neareSt
ceptable warehouse on all cotton above
low midding grade of 7s-inch staple.
Only the crop now in the hands OF
farmers will be eligible for loans and
no loans will be made after June 80,
1884
The effect Of the loans will be to
assure farmers a minimum Of 10 cents
pound for the cotton they still hold
1t has been selling somewhat below
that for some time
There will be restrictions as to the
time Of sale to prevent a runaway
market. For example, If the price
reached IS cents, farmers would be
compelled to SELL
Wallace Explains Plan.
Anplifying President Roosevelts oral
statement Secretary Wallace said:
Loans will be 10 cents a pound
at the warehouse on cotton CHASING
low middling or better as to grade,
seven-eighth inch or better as to staple
and cents per pound on cotton class
low middling or better as to grade
and under seven-eighth inch as to
staple.
The loans will be available to farm
ers who agree to abide by the regu-
lations and cooperate with the Secre-
tary Of Agriculture in the 1884 cot
ton acreage reduction program, pro-
vided reduction of not more than
40 per cent of the average acreage will
be required of any farmer. Farmers
who sign and fulfill contracts to CO.
operate in the program will get their
| benefit payments in addition to the
loans.
The loan value will be stepped up
at the rate of As cents a bale for each
month after October This will cover
carrying charges and interest. The in
terest rate to farmers will be PSI
! cent
Jones Issues Statement.
The following statement was issued
| last night by Jesse H. Jones, chairma
! OF the Reconstruction Finance Corpor
| alton:
Following the Presidents announce
q
modify Credit Corporation with powers
| to buy, hold, sell, lend upon or other
| wise deal in such commodities as in his
! discretion seems for the best interest of
/ the recovery program.
J The corporation will have an initial
capital of 100000 to be allocated by
! the President from his emergency fund.
The corporation will be operated In
connection with the Reconstruction
| Finance Corporation and its first activ-
tiles will be to provide credit for lending
| 10 cents per pound on cotton
Efforts will be made if possible to
employ the normal channels and
agencies for lending upon handling and
storing the cotton.
"It is the intention of the R. F. c..
! il possible. to arrange a form of guar
! antee that will be acceptable to banks
and others lending directly to the cct-
ton producers that will enable such
banks and lending institutions to make
loans under regulations to be prescribcd d
by the r. F. c.. so that the loans may
be carried by the banks or ether lend
ing agencies and rediscounted with the
Commodity Credit Corporation without
recourse any time prior to July l, 1894
Interest Rate 4 Per Cent.
The interest rate will be 4 per cent
to the farmer. and loans will be made
at 10 cents per pound at the warehouse
on low middling or better as to grade
and Is or better as to staple; cents
per pound on low middling or better as
to grade and below % as to staple. Nc
premium will be allowed on account OF
variations in grade and for staples
above low middling q and no varia-
tions in the rate of loans will be made
| on account of the variation of location
of warehouses in which the cotton is
stored
The producer will be permitted tc
store in or ship his cotton to ary
available warehouse that is satisfac.
tory to himself and the r. F. c.. anC
in making loans the rate will be lC
cents per pound at the acceptable ware
house.
Loans will be made to those pro-
dCcers who agree to conform with the
requirements Of the United States De-
partment of Agriculture with reference
to cotton acreage reduction of 1884
Assuming that approximately 7,000,-
900 bales of cotton are still in the
hands of producers and that all will
avail of their privilege to borrow unde,
this plan and hold the cotton, approx
mately $3.50 100000 will be required or
the part of the Reconstruction Finance
Corporation.