440 IOWA DEPARTMENT OF AGRICULTURE 



spection of a federal or state officer morning, noon and night, as your 

 postoffices are, so that there is always a guarantee of the parity of the 

 receipt that the goods are back of it. If you undertake to sell one of 

 those receipts, you couldn't do it in the money markets of the world. You 

 might do it locally in a small way. It is not bated to get the big fish; it 

 will get the minnows. 



Let's take the receipts of hundreds of warehouses on wheat, for ex- 

 ample, and pool them and take them from three or four states and pool 

 them in what I would like to call a commodity bank in the hands of a 

 trustee appointed by the federal government, or jointly by the state and 

 federal government. If you want to let that commodity bank then issue 

 its debentures, its certificates of indebtedness, with maturities of six, nine, 

 twelve and fifteen months, and offer these for sale in the markets of the 

 world, I will risk my reputation as a prophet that they will sell. There 

 are other details which must be worked out, but that is the principle. 

 And have I proof of that? (I cannot read as J could when I was 26 — more 

 is the pity.) This just came to me the other day from one of our bank 

 officials in Spokane, Washington. "The Washington Wheat Growers As- 

 sociation, The Idaho Wheat Growers Association; 8% wheat gold bond; 

 $100.00." This is a copy. The original is issued in the amount of $100, 

 $500, and $1,000 only. There It is! The wheat growers of Washington 

 and Idaho have gotten together and they have done precisely what I have 

 been advising farmers to do for six months; they pooled their warehouse 

 receipts and issued that bond against them. I thought I had his letter 

 here, and I still think L have, but I can't find it; but I want to tell you 

 what he says about it. He knew I was interested in this thing and sent 

 it to me. I don't seem to have it; I brought it — my wife looks after most 

 of my things. (Laughter.) At any rate, in his letter to me he says that 

 notwithstanding the tightness of the local money market, you will be 

 surprised to know that these bonds have sold quite freely upon the mar- 

 ket. Now, if I know if a thing will work locally; if the principle will 

 work locally on a small collection of wheat in the states of Washington 

 and Idaho, what can be done with it in a state where, instead of having 

 but ten or fifteen thousand bushels in storage, you had 100-million bush- 

 els in storage as security back of these outstanding bonds? Or if in 

 states having, as we have in South Carolina, 20,000 or 50,000 bales of 

 cotton in storage, and receipts issued against them; suppose we had 2- 

 million bales in storage representing a value of 100-million dollars; don't 

 you think we could sell these certificates? Somebody says "Yes, you 

 could, but it would cost you 7%, perhaps;" this local one sold for 8%. 

 Listen, my friends! I will lay this down as an economic truth: On a 

 short-term loan, the interest rate is not the important thing. On a short- 

 term loan, the getting of the loan is the important thing. Do you catch 

 the difference? In other words, if the wheat growers of America, and the 

 cotton growers of America, and the corn growers of America, and the 

 wool growers of America, had a system in operation like this whereby 

 they were enabled to get money for the next twelve months, the prob- 

 ability is that they would be saved not millions, but hundreds of millions 

 in value. Do I make that clear to you, my friends! If so, I am going to 



