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Credit Equality Is Our 

 I ^ Aim — Myers ^ 



: Trouble Not So Much Wifh Interest Rates As With 

 '' , ; I Prices, He Says 



PERMANENT credit equality for ag- 

 riculture — that was the goal set for 

 farmers' co-operative credit institu- 

 tions by Governor W. I. Myers of the 

 Farm Credit Administration in his ad- 

 dress Wednesday afternoon in the High 

 School Auditorium at Quincy. Speaking 

 extemporaneously, Gov. Myers gave a 

 clear analysis of the government's future 

 aim and its past experiences in assisting 

 farmers with their credit problems. 



"Whether or not the co-operative cred- 

 it institutions established by the Farm 

 Credit Administration in time come to 

 be owned entirely by farmers, depends 

 largely on the ability of the local insti- 

 tutions to operate soundly and secure 

 prompt collection of loan installments," 

 Governor Myers said. 



Not To. Subsidize 



tThe Federal Land Banks, the produc- 

 tion credit associations and the banks for 

 co-operatives are not organized to lend 

 government money or subsidize the farm- 

 ing industry, but to borrow money from 

 investment markets and reloan it to 

 farmers on sound business principles. I 

 cannot emphasize too strongly," he said, 

 "that this program requires the very 

 soundest management on the part of the 

 local credit units and a high record of 

 pron^t loan payments. 



"During the past year collections on 

 all types of farm loans improved decided- 

 ly and this has had a beneficial effect on 

 the standing of the bonds and agricul- 

 tural securities of our institutions in the 

 investment markets. Continued improve- 

 ment in loan collections should further 

 increase the demand for our securities 

 and farmers will be assured of adequate 

 funds to finance their requirements at 

 reasonable rates of interest." 



Pointing to the banner to the right of 

 the stage labeled, "Lower Farm Inter- 

 est Rates," Myers said, "We can lower 

 interest rates oijy by cutting the return 

 to the lender, reducing the co^t of dis- 

 tributing credit Which includes mortgage 

 filing fees, inspection, etc., and by re- 

 ducing the number of losses. 



"We can't operate the land banks for 

 less than 1% interest. We are making 

 progress in cutting recording fees. The 

 real trouble has been with farm prices, 

 not with interest rates. When prices 

 •re where they ought to be, five percent 



interest is fair and reasonable. It's cost- 

 ing about that now, and at present the 

 government is subsidizing slightly long 

 term farm credit at 4 % % . You can't have 

 co-operative credit and subsidy. The 

 permanent farm credit plan must be de- 

 centralized with district and community 

 units. And if these are to succeed farm- 

 ers must elect able, qt^alified directors 

 to run them." 



Mr. Myers pointed out that collection 

 of loan payments on Land Bank Com- 

 missioner's loans wKljh have been made 

 to the more heavHymdebted farmers im- 

 proved decidedly in 1934. "Last year," 

 he said, "in ^ite of a terrible drought 

 over almost hajf the .^country, more than 

 82 per cent of the^matured installments 

 on Land Bank Commissioner's loans were 

 paid. In several districts unaffected by 

 drought the collection record is well over 

 90 per cent. If heavily indebted farmers 

 could roll up a record like that during the 

 worst drought year in memory, I don't 

 think they will have much trouble in go- 

 ing on up toward 100 per cent payments 

 this_year. ■■..";->;■ ■ ', '. 



Want Credit Standing ,'* ' 



"Farmers' credit co-operatives should 

 support interest rates which are reason- 

 ably low but adequate to cover the cost 

 of running a self-supporting credit busi- 

 ness. A shot-in-the-arm in the form of a 

 subsidized interest rate may provide a 

 certain amount of temporary relief but 

 it will not build up a credit standing for 

 agriculture. It will not help to present a 

 clear claim for a fair share of the invest- 

 ment funds of the Nation. It will not 

 help us to build up a credit system which 

 is truly co-operative and for which we 

 can obtain the support of the great ma- 

 jority of farmers who pay their debts 

 and ask a fair showing — but nothing 

 else. 



"I have an inherent beliflf in the abil- 

 ity of farmers to meet their obligations. 

 If I didn't I would stop being an advo- 

 cate of co-operative credit. I believe the 

 progT'ess in co-operative credit is insep- 

 arably intertwined with other phases 

 of agricultural advancement. The plan 

 of co-operative credit through the Farm 

 Credit Administration is simple. It is to 

 provide long-term mortgage credit, short- 

 term production credit and credit f6r 

 farmers' baying and selling organizations 



Charlet F. Cnmminss, Man&^er. Farmers N«tioaal 

 Grain Corporation. Peoria, congratulates lCaaac«r 

 Ben Each of the Waahing-ton Grain Compaajr wbe 

 delivered the &rst Load of Com to the new FamMn 

 National Elevator at Peoria. Manager HmlM* 

 Fahnkopf of Zllinoit Grain Corporation, right. H- 

 linoia Grain Corporation will bold its annual m««tlag 

 in Peoria, Per* Xarqnette Hotel, Tuesday, Fek. It. 



by borrowing' money from investors and 

 reloaning it to farmers through proper- 

 ly capitalized and soundly operated insti- 

 tutions. I believe we can achieve equal- 

 ity for agriculture in the field of credit 

 by properly managing our credit ma- 

 chinery and living up to the obligation of 

 meeting our loan payments promptly 

 when due. This will enable farmers to 

 compete on equal terms for the loanable 

 funds of investors, wherever such fund* 

 may be found. This system will render 

 the farmer independent of local sources 

 of credit which may be inadequate or 

 erratic. The smail cotton farmer in the 

 southernmost states, the mid-western 

 grain farmer, or the isolated cattlemen 

 in the mountain ranges of the Pacific 

 states can draw funds from New York, 

 Chicago or San Francisco or other large 

 investment markets.'' 



Producers Creamery 



^ Of Peoria Sells Stock 



A wider distribution of* preferred stock 

 among patrons is being sought by th* 

 Producers Creamery of Peoria. The par 

 value of preferred stock has been raised 

 from $10 to |25 per share, and the rat* 

 of interest fixed at seven per cent an- 

 nually. Solicitation is going forward 

 with great success in the eight surround- 

 ing counties under the leadership of the 

 County Farm Bureaus. The object is to 

 put the Producers Creamery on the same 

 corporate basis as co-operative creameries 

 operating at Bloomington, Champaign 

 and OIney. 



FEBRUARY, 1985 



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