Evening star., 1934-01-07
ADDITIONAL LOANS
TOFARMERS O. K. D
Senate Agriculture Group Ap-
proves of $1O0,000,000
More on Crops.
ey the Associated Press.


The Senate Agriculture Committee
yesterday approved lending by the Gov
ernment of another S10O,0OO.000, while
officials estimated that cotton and corn
producers s,-eady have borrowed $780,
100000 since Fall
The $l00,00O,OOO would be for crop
production loans, similar to those made
during the past several years. but The
cctton and corn loans we're, IN effect,
stabilization arrangement planned
under auspices CT the Farm Admins
tration
The Senate committee agreed to a
bill by Chairman smith under which
he said the radiu. of seasonal Govern
ment aid to agriculture would be
greatly increased.
Corn Loans Due August /.
Cotton and corn producers, officials
estimated to date, already have bor-
roWed approximately Sl50,000,000 from
the Commodity Credit Corporation. 1t
is letting cotton producers have 10
cents pounu on their staples and corn
growers as cents a bushel.
Should the price of commodities re-
main below the loan figures the Gov
eminent stands the loss. II it rises
above, the farmers may pay off the
loan, sell and keep the profit. The corn
loans are due August l and the cot
ton loans July l.
The Commodity Credit Corporation
has made direct loans of S15,000,000 on
corn December 30, but supplemental
loans, principally by banks, have
brought this total to around s50,000,-
ooo0 or more.
On January cotton loans by the
credit corporation itself were $52,000,-
600, but it was estimated that bank
loans would bring this figure to $780,
o00 or more.
this case also.
Banks are cooperating with the
credit corporation, since they do so at
no risk to themselves and their aid
facilitates the work Of meeting pro-
ducer demands
Farm Administration officials frankly
said the loans we're gamble, since the
Government took all the risk.
They pointed out, however, that a
loan prerequisite was that borrowers
agree to join in the 1894 cotton and
corn reduction program. This insures
that thousands Of producers will take
part In the campaigns to reduce cot
ton acreage this year by 40 per cent
and corn by 20 per cent.
Balances Are Expected.
The Farm Administration asserts
that the loans are made around pre-
vailing market prices and that there is
little risk of further tapping the Treas
ury because the reduction campaigns
are expected to hoist the price of the
two commodities by tie time the loans
are due
Tho Decentralization EIoorce Cor,1ora
ton gave the credit agency S150,OOO,-
900 for the corn loans and S250,000.-
900 for cotton. Not all this money will
be used, officials say. the final figure
for cotton being placed at around $780,
oo0 600. A stable portion of the corn
fund also is expected to be left over, al
though experts were chary of any pre-
diction as to this residue.
The first corn loans were made in
Iowa on November %. Corn certified
for borrowing in that State has reach
ed the sum of S23,000,000. Corn loans
are being made now at the rate Of over
100000 daily, but the loan period is to
end March /.
Regardless of the final result of the
experiment, farm officials credit a good
deal Of Southern recovery to the plan
and they asserted also that 1t had made
the Middle West think less about hard
times.
The cotton loans cover the entire pro-
oucing area for the staple. The regu-
lations are that the cotton must be in
the hands Of the producer, must be low
riddling in grade, and the loan is 10
cents f. o. b., the nearest accepted
warehouse.
Satisfactory Laws Lacking.
The corn loans. however, are being
made only in those areas where corn
surpluses are produced and in States
that have acceptable farm warehouse
acts in most instances. Satisfactory
statutes were lacking, officials said, in
Indiana, Wisconsin and Michit>n. but
some loans are being made tfe> on
shelled corn. The producers get 45
cents on the farm
States in which the entire areas are
eligible for the corn loans include Iowa
Illinois, Nebraska and Kansas. States
where loans are made only in certain
counties-those which produce surpluses
are Indiana Ohio. Missouri, South
Dakota, Minnesota, Wisconsin, Michi-
gan and Colorado.
Material changes in regulations are
not expected although action to change
collateral requirements in Indiana to
facilitate lending there probably will
come within the next few days
Lynn P. Talley Of the Reconstruction
Corporation is president of the Com
modify Credit Corporation. and Oscar
Johnston of the Farm Administration
is vice president Johnston is credited
with working out the lean plan for
cotton.