446 ANNUAL REPORT OF THE Ofif. Doc. 



volume of money and the rate of interest are controlled by the govern 

 ment bank of issue. It has been declared by the present Board that 

 its policy will be to grant to agricultural paper — paper secured by 

 warehouse receipts representing agricultural products — a preferen- 

 cial rate of interest. The rate under present conditions, on this class 

 of paper is three per cent. This rate is as low as any foreign govern- 

 ment has ever given to its farm citizens. Last year, we grew nearly 

 ment has ever given to its farm products. If these products had been 

 properly classified and warehoused, this immense value would have 

 been available as collateral security at this very low rate of interest; 

 and these commodities were in actual ownership and control of our 

 farmers. The Southern farmer was able to take a limited advantage 

 of this rate because, under the law, the Department of Agriculture 

 supervises the grading of his cotton. This is done under the Cotton 

 Standard Act. Of course, it is but a beginning. Neither the banks 

 nor the farmers fully understood the possibilities which lay before 

 them. Then, too, the banks were afraid to encourage this low rate 

 for fear of the effect it might have on their commercial business. 

 There was, however, several million dollars of rediscounting done by 

 the Federal Reserve Banks at the three per cent, rate, This busi- 

 ness is sure to grow by leaps and bounds as education spreads among 

 the planters of that section. 



The same opportunity is open to the Northern farmer as soon as we 

 can secure a law standardizing our farm products as cotton is 

 standardized. I had the honor to introduce the Moss Grain Grades 

 Act in the last Congress. It passed the House by practically a unani- 

 mous vote but failed in the Senate. I have reintroduced it in the 

 present Congress and it is number 4646. Mr. Lever has introduced 

 his Warehouse Bill. The bill also passed the House during the last 

 Session but failed in the Senate. The Grain Grades Act authorizes 

 the Secretary of Agriculture to fix uniform standards of quality and 

 condition for all principal commercial grains and to supervise and 

 enforce their application in the grading of all grain offered for sale." 

 The Warehouse Act authoiizes the Secretary of Agriculture to li- 

 cense and to bond warehouses open to all producers of farm pro- 

 ducts who may care to store them therein. The government will 

 have supervision of all operations of warehousing, grading the pro- 

 ducts, and issuing the receipts. If these two bills were in force, any 

 farmer in the Union could take his surplus farm products, have them 

 graded according to government standards and store them in ware- 

 houses supervised and bonded by the United States. He could then 

 take his receipts to the nearest bank and get a lower rate of interest 

 than is given to any other class of paper. If farmers were to or- 

 ganize a co-operative bank, it would be entirely possible to secure 

 money at three per cent, less only the overhead charges of operation. 

 These two proposed laws must be enacted if we are to secure the full 

 benefit of own new banking law. If farmers will organize and de- 

 mand the passage of these measures, they will be enacted into law. 

 It is the open door to cheap credit ; it is a certain method of securing 

 three per cent, money to finance our farming operations, and if we 

 press forward along these lines, we will secure for ourselves as low 

 rates on personal farm loans as any nation has ever granted to farm- 

 ers for like purposes. Can we ask for greater results? 



